Quote:

---

He did mention wishing he had known this 20 years ago

In 2005, 20 years ago, Gold was $430 per ounce. Again, it's $4,230 Today.

And it looks like the SP 500 was around 1200 in 2005, so let's say it's up 6x in 20 years and Gold is up 10x.
Just wish we knew what the next 20 years will bring. My bet is on hard assets over Paper.

---

Gold took out its 1975 inflation adjust high just recently.

Over longer periods the broad stock market has outperformed gold by a 5-1 ratio.

Be careful of your wager.

Burdizzo said:

---

That is a great recap of landmark events during that period. The irony is that the 16th, 17th, and Fed Reserve Act were largely responses to progressive and populist desires to empower the people. Instead what it did was removed economic freedom and shackled middle- and low- income Americans to the Federal Government

---

I can see that for the 17th, but the 16th seems purely negative and intrusive. How Americans passed so much monitoring and confiscatory power to an unelected body seems very counter-character. And this was before World War One and its deluge of expenses that might explain it.

Ribeye-Rare said:

---

H-A,

I was hoping you would weigh in on this topic so that I could get your take on this:

Quote:

---

The winning approach mirrors successful Monopoly strategy: prioritize ownership of scarce, productive assets over currency accumulation. Real estate in desirable locations, gold with its 5,000-year history as a store of value, and Bitcoin with its mathematically enforced scarcity represent assets that cannot be devalued through central bank money creation.

---

I noticed that analysis left out financial assets (specifically stocks) valued in U.S. Dollars.

Given that you are one who does more than 'dabble' in equities, do you view stocks as just as good a hedge against currency devaluation as the three assets listed?

Ostensibly, stocks supposedly are valued based on the future earning potential of the issuing companies, or perhaps on the underlying value of those companies' assets, and since those earnings and/or assets are valued in U.S. Dollars, it would seem their nominal values should rise as the currency is devalued.

I realize though, that's a bit simplistic, and that emotional and other factors can weigh in on stock valuations. I guess a case in point would be the decline earlier this year that supposedly was due to the fear of Trump's tariffs, but which now seems to have vanished like a mirage.

---

Against currency devaluation.. sure. But I don't agree that's the path that's coming. I think we are heading toward structural strength in the dollar, at least in the mid-term. And if that happens, the only thing that's actually safe is the dollar itself, as purchasing power would rise while the value of assets falls against it.

Windy City Ag said:

---

Quote:

---

He did mention wishing he had known this 20 years ago

In 2005, 20 years ago, Gold was $430 per ounce. Again, it's $4,230 Today.

And it looks like the SP 500 was around 1200 in 2005, so let's say it's up 6x in 20 years and Gold is up 10x.
Just wish we knew what the next 20 years will bring. My bet is on hard assets over Paper.

---

Gold took out its 1975 inflation adjust high just recently.

Over longer periods the broad stock market has outperformed gold by a 5-1 ratio.

Be careful of your wager.

---

The stock market has vastly underperformed gold since the SPX/GOLD ratio put in a high in 2000.

Burdizzo said:

---

That is a great recap of landmark events during that period. The irony is that the 16th, 17th, and Fed Reserve Act were largely responses to progressive and populist desires to empower the people. Instead what it did was removed economic freedom and shackled middle- and low- income Americans to the Federal Government

---

Interesting to hear how it was packaged at that time. It's difficult to discern whether the people selling that vision were sincere and just spectacularly wrong or if it was deception. We've known the evils of central banking for a very long time so I have a hard time believing that was just a good faith effort that went poorly. Jefferson said banking institutions are a greater threat to liberty than standing armies. It's not like this outcome couldn't have been predicted.

At this point the entire world is shackled to the federal government. Unwinding this mess would be extremely painful which is why I have zero hope that we'll ever do so willingly. It's gonna collapse because we won't do what's necessary to prevent it.

LOYAL AG said:

---

Burdizzo said:

---

That is a great recap of landmark events during that period. The irony is that the 16th, 17th, and Fed Reserve Act were largely responses to progressive and populist desires to empower the people. Instead what it did was removed economic freedom and shackled middle- and low- income Americans to the Federal Government

---

Interesting to hear how it was packaged at that time. It's difficult to discern whether the people selling that vision were sincere and just spectacularly wrong or if it was deception. We've known the evils of central banking for a very long time so I have a hard time believing that was just a good faith effort that went poorly. Jefferson said banking institutions are a greater threat to liberty than standing armies. It's not like this outcome couldn't have been predicted.

At this point the entire world is shackled to the federal government. Unwinding this mess would be extremely painful which is why I have zero hope that we'll ever do so willingly. It's gonna collapse because we won't do what's necessary to prevent it.

---

I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop. - FRIEDRICH A. HAYEK

Quote:

---

The stock market has vastly underperformed gold since the SPX/GOLD ratio put in a high in 2000.

---

Right, because you are cherry-picking the most favorable comparison starting point in the history of the two asset classes.

Lets star the clock at 1975. . .a 50 year period.

Gold has returned less than 6% annually with a standard deviation of 18% for a Sharpe Ration of 0.36

The SPX has returned 12.5% annually since that period with much lower volatility.

Windy City Ag said:

---

Quote:

---

The stock market has vastly underperformed gold since the SPX/GOLD ratio put in a high in 2000.

---

Right, because you are cherry-picking the most favorable comparison starting point in the history of the two asset classes.

Lets star the clock at 1975. . .a 50 year period.

Gold has returned less than 6% annually with a standard deviation of 18% for a Sharpe Ration of 0.36

The SPX has returned 12.5% annually since that period with much lower volatility.

---

Now do Bitcoin.

Its Texas Aggies, dammit said:

---

LOYAL AG said:

---

Burdizzo said:

---

That is a great recap of landmark events during that period. The irony is that the 16th, 17th, and Fed Reserve Act were largely responses to progressive and populist desires to empower the people. Instead what it did was removed economic freedom and shackled middle- and low- income Americans to the Federal Government

---

Interesting to hear how it was packaged at that time. It's difficult to discern whether the people selling that vision were sincere and just spectacularly wrong or if it was deception. We've known the evils of central banking for a very long time so I have a hard time believing that was just a good faith effort that went poorly. Jefferson said banking institutions are a greater threat to liberty than standing armies. It's not like this outcome couldn't have been predicted.

At this point the entire world is shackled to the federal government. Unwinding this mess would be extremely painful which is why I have zero hope that we'll ever do so willingly. It's gonna collapse because we won't do what's necessary to prevent it.

---

I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop. - FRIEDRICH A. HAYEK

---

I'm not aware of any history at all where the currency isn't managed by the government. Even the most anti-government founders in history didn't try and create a currency separate from the government they were creating. Not even sure how that would work. Am I misinterpreting that quote?

Quote:

---

Now do Bitcoin.

---

LOYAL AG said:

---

Its Texas Aggies, dammit said:

---

LOYAL AG said:

---

Burdizzo said:

---

That is a great recap of landmark events during that period. The irony is that the 16th, 17th, and Fed Reserve Act were largely responses to progressive and populist desires to empower the people. Instead what it did was removed economic freedom and shackled middle- and low- income Americans to the Federal Government

---

Interesting to hear how it was packaged at that time. It's difficult to discern whether the people selling that vision were sincere and just spectacularly wrong or if it was deception. We've known the evils of central banking for a very long time so I have a hard time believing that was just a good faith effort that went poorly. Jefferson said banking institutions are a greater threat to liberty than standing armies. It's not like this outcome couldn't have been predicted.

At this point the entire world is shackled to the federal government. Unwinding this mess would be extremely painful which is why I have zero hope that we'll ever do so willingly. It's gonna collapse because we won't do what's necessary to prevent it.

---

I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop. - FRIEDRICH A. HAYEK

---

I'm not aware of any history at all where the currency isn't managed by the government. Even the most anti-government founders in history didn't try and create a currency separate from the government they were creating. Not even sure how that would work. Am I misinterpreting that quote?

---

Something with these characteristics might have a chance:

* Decentralized, peer-to-peer network architecture with no central authority or intermediary required for transactions
* Fixed and verifiable supply cap, making it inherently resistant to inflationary monetary policies
* Borderless and censorship-resistant transfer of value, operating outside the control of any single government or corporation
* Public, immutable, and cryptographically secured ledger that provides transparent transaction history for all participants
* Pseudonymous system that allows for financial interactions without mandatory personal identification
* Programmable monetary policy with rules enforced by code and network consensus, not human discretion
* Global settlement network that operates 24/7, requiring only an internet connection for participation

Windy City Ag said:

---

Quote:

---

The stock market has vastly underperformed gold since the SPX/GOLD ratio put in a high in 2000.

---

Right, because you are cherry-picking the most favorable comparison starting point in the history of the two asset classes.

Lets star the clock at 1975. . .a 50 year period.

Gold has returned less than 6% annually with a standard deviation of 18% for a Sharpe Ration of 0.36

The SPX has returned 12.5% annually since that period with much lower volatility.

---

Yeah, but can I get my teeth covered in stocks like I can gold!?!?!



SCOREBOARD MOTHER****ER!!!!!1

Great post! Very few people realize this truth and the consequences we live with because of it.

Its Texas Aggies, dammit said:

---

LOYAL AG said:

---

Its Texas Aggies, dammit said:

---

LOYAL AG said:

---

Burdizzo said:

---

That is a great recap of landmark events during that period. The irony is that the 16th, 17th, and Fed Reserve Act were largely responses to progressive and populist desires to empower the people. Instead what it did was removed economic freedom and shackled middle- and low- income Americans to the Federal Government

---

Interesting to hear how it was packaged at that time. It's difficult to discern whether the people selling that vision were sincere and just spectacularly wrong or if it was deception. We've known the evils of central banking for a very long time so I have a hard time believing that was just a good faith effort that went poorly. Jefferson said banking institutions are a greater threat to liberty than standing armies. It's not like this outcome couldn't have been predicted.

At this point the entire world is shackled to the federal government. Unwinding this mess would be extremely painful which is why I have zero hope that we'll ever do so willingly. It's gonna collapse because we won't do what's necessary to prevent it.

---

I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop. - FRIEDRICH A. HAYEK

---

I'm not aware of any history at all where the currency isn't managed by the government. Even the most anti-government founders in history didn't try and create a currency separate from the government they were creating. Not even sure how that would work. Am I misinterpreting that quote?

---

Something with these characteristics might have a chance:

* Decentralized, peer-to-peer network architecture with no central authority or intermediary required for transactions
* Fixed and verifiable supply cap, making it inherently resistant to inflationary monetary policies
* Borderless and censorship-resistant transfer of value, operating outside the control of any single government or corporation
* Public, immutable, and cryptographically secured ledger that provides transparent transaction history for all participants
* Pseudonymous system that allows for financial interactions without mandatory personal identification
* Programmable monetary policy with rules enforced by code and network consensus, not human discretion
* Global settlement network that operates 24/7, requiring only an internet connection for participation

---

I assumed that's where you were going. How does that serve the 50% or more of the globe that doesn't have reliable electricity never mind internet? That aside the sad truth is we have no history of governments giving up mechanisms of control and Bitcoin will be no different. The UK just arrested a citizen serf for posting photos of himself with guns, photos that were taken in the U.S. Tyranny is on the rise globally and Trump is just a slowing of that trend here. You have Bitcoin because "they" let you have it but history teaches us that when they want us to give it up we will. Not all of us obviously but the vast majority. See guns in Australia and the UK.

LOYAL AG said:

---

Its Texas Aggies, dammit said:

---

LOYAL AG said:

---

Its Texas Aggies, dammit said:

---

LOYAL AG said:

---

Burdizzo said:

---

That is a great recap of landmark events during that period. The irony is that the 16th, 17th, and Fed Reserve Act were largely responses to progressive and populist desires to empower the people. Instead what it did was removed economic freedom and shackled middle- and low- income Americans to the Federal Government

---

Interesting to hear how it was packaged at that time. It's difficult to discern whether the people selling that vision were sincere and just spectacularly wrong or if it was deception. We've known the evils of central banking for a very long time so I have a hard time believing that was just a good faith effort that went poorly. Jefferson said banking institutions are a greater threat to liberty than standing armies. It's not like this outcome couldn't have been predicted.

At this point the entire world is shackled to the federal government. Unwinding this mess would be extremely painful which is why I have zero hope that we'll ever do so willingly. It's gonna collapse because we won't do what's necessary to prevent it.

---

I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop. - FRIEDRICH A. HAYEK

---

I'm not aware of any history at all where the currency isn't managed by the government. Even the most anti-government founders in history didn't try and create a currency separate from the government they were creating. Not even sure how that would work. Am I misinterpreting that quote?

---

Something with these characteristics might have a chance:

* Decentralized, peer-to-peer network architecture with no central authority or intermediary required for transactions
* Fixed and verifiable supply cap, making it inherently resistant to inflationary monetary policies
* Borderless and censorship-resistant transfer of value, operating outside the control of any single government or corporation
* Public, immutable, and cryptographically secured ledger that provides transparent transaction history for all participants
* Pseudonymous system that allows for financial interactions without mandatory personal identification
* Programmable monetary policy with rules enforced by code and network consensus, not human discretion
* Global settlement network that operates 24/7, requiring only an internet connection for participation

---

I assumed that's where you were going. How does that serve the 50% or more of the globe that doesn't have reliable electricity never mind internet? That aside the sad truth is we have no history of governments giving up mechanisms of control and Bitcoin will be no different. The UK just arrested a citizen serf for posting photos of himself with guns, photos that were taken in the U.S. Tyranny is on the rise globally and Trump is just a slowing of that trend here. You have Bitcoin because "they" let you have it but history teaches us that when they want us to give it up we will. Not all of us obviously but the vast majority. See guns in Australia and the UK.

---

You played dumb. I answered your question. Now you have moved the goalposts. If you don't believe me or don't get it, I don't have time to try to convince you, sorry.

Its Texas Aggies, dammit said:

---

LOYAL AG said:

---

Its Texas Aggies, dammit said:

---

LOYAL AG said:

---

Its Texas Aggies, dammit said:

---

LOYAL AG said:

---

Burdizzo said:

---

That is a great recap of landmark events during that period. The irony is that the 16th, 17th, and Fed Reserve Act were largely responses to progressive and populist desires to empower the people. Instead what it did was removed economic freedom and shackled middle- and low- income Americans to the Federal Government

---

Interesting to hear how it was packaged at that time. It's difficult to discern whether the people selling that vision were sincere and just spectacularly wrong or if it was deception. We've known the evils of central banking for a very long time so I have a hard time believing that was just a good faith effort that went poorly. Jefferson said banking institutions are a greater threat to liberty than standing armies. It's not like this outcome couldn't have been predicted.

At this point the entire world is shackled to the federal government. Unwinding this mess would be extremely painful which is why I have zero hope that we'll ever do so willingly. It's gonna collapse because we won't do what's necessary to prevent it.

---

I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop. - FRIEDRICH A. HAYEK

---

I'm not aware of any history at all where the currency isn't managed by the government. Even the most anti-government founders in history didn't try and create a currency separate from the government they were creating. Not even sure how that would work. Am I misinterpreting that quote?

---

Something with these characteristics might have a chance:

* Decentralized, peer-to-peer network architecture with no central authority or intermediary required for transactions
* Fixed and verifiable supply cap, making it inherently resistant to inflationary monetary policies
* Borderless and censorship-resistant transfer of value, operating outside the control of any single government or corporation
* Public, immutable, and cryptographically secured ledger that provides transparent transaction history for all participants
* Pseudonymous system that allows for financial interactions without mandatory personal identification
* Programmable monetary policy with rules enforced by code and network consensus, not human discretion
* Global settlement network that operates 24/7, requiring only an internet connection for participation

---

I assumed that's where you were going. How does that serve the 50% or more of the globe that doesn't have reliable electricity never mind internet? That aside the sad truth is we have no history of governments giving up mechanisms of control and Bitcoin will be no different. The UK just arrested a citizen serf for posting photos of himself with guns, photos that were taken in the U.S. Tyranny is on the rise globally and Trump is just a slowing of that trend here. You have Bitcoin because "they" let you have it but history teaches us that when they want us to give it up we will. Not all of us obviously but the vast majority. See guns in Australia and the UK.

---

You played dumb. I answered your question. Now you have moved the goalposts. If you don't believe me or don't get it, I don't have time to try to convince you, sorry.

---

I didn't move anything. You offered up a solution that's wholly impossible to implement. A world run on bitcoin is a pipe dream from the side of libertarians that have no understanding of the world as it is. I didn't think I needed to tell you the proposed solution had to be possible but apparently I did. So try again. Never in eleventy billion years will the governments of the world give up control over their currencies to a level sufficient to let the global economy run on bitcoin. It's 100% a ridiculous assumption with zero basis in history to believe otherwise. There will be global warfare before that happens. So let's be practical. What are the options?

That is obsolete thinking, still a problem of course but income tax doesn't even come close to covering the spending that is done due to issuance of debt. Taxes are already too high across the board and going higher. There is no amount of taxation that will ever cover the spending.

There is something in the OP post that most just gloss over, one of the biggest arguments to end the Fed is rarely talked about. The Fed does NOT buy US treasuries directly, but they buy from the big money center and national banks that do purchase them, and the Fed ALWAYS buy them. It is very hard to argue they are independent or even quasi-government. Essentially the government is issuing debt and buying it themselves. It's insane.

The Fed / govt. answer is always to just print more $$$, create more debt, we'll worry about the consequences later or never. It's not sustainable. A person, family or business cannot do that, a city, county or state cannot do it but for holes getting filled by the federal government. So when will it all fail? Nobody knows and economists can't give an answer how much is too much, but it will happen when the US goes to issue more treasuries and nobody buys it, that will crater the world economy and make the Great Depression seem like a spring picnic in the park.

What drove the housing financial crisis? "Quasi government" Fannie and Freddie buying billions and billions of $$ of mortgages / mortgage backed securities that banks did not want to hold on their books and the banks KNEW Fannie/Freddi would buy it all. Strip mall mortgage broker originates a mortgage, sells it to Chase or Citi who package it and sell it to Fannie/Freddie, zero accountability and thought of risk of loss along the entire chain as they knew it would get offloaded.

LOYAL AG said:

---

Its Texas Aggies, dammit said:

---

LOYAL AG said:

---

Its Texas Aggies, dammit said:

---

LOYAL AG said:

---

Its Texas Aggies, dammit said:

---

LOYAL AG said:

---

Burdizzo said:

---

That is a great recap of landmark events during that period. The irony is that the 16th, 17th, and Fed Reserve Act were largely responses to progressive and populist desires to empower the people. Instead what it did was removed economic freedom and shackled middle- and low- income Americans to the Federal Government

---

Interesting to hear how it was packaged at that time. It's difficult to discern whether the people selling that vision were sincere and just spectacularly wrong or if it was deception. We've known the evils of central banking for a very long time so I have a hard time believing that was just a good faith effort that went poorly. Jefferson said banking institutions are a greater threat to liberty than standing armies. It's not like this outcome couldn't have been predicted.

At this point the entire world is shackled to the federal government. Unwinding this mess would be extremely painful which is why I have zero hope that we'll ever do so willingly. It's gonna collapse because we won't do what's necessary to prevent it.

---

I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop. - FRIEDRICH A. HAYEK

---

I'm not aware of any history at all where the currency isn't managed by the government. Even the most anti-government founders in history didn't try and create a currency separate from the government they were creating. Not even sure how that would work. Am I misinterpreting that quote?

---

Something with these characteristics might have a chance:

* Decentralized, peer-to-peer network architecture with no central authority or intermediary required for transactions
* Fixed and verifiable supply cap, making it inherently resistant to inflationary monetary policies
* Borderless and censorship-resistant transfer of value, operating outside the control of any single government or corporation
* Public, immutable, and cryptographically secured ledger that provides transparent transaction history for all participants
* Pseudonymous system that allows for financial interactions without mandatory personal identification
* Programmable monetary policy with rules enforced by code and network consensus, not human discretion
* Global settlement network that operates 24/7, requiring only an internet connection for participation

---

I assumed that's where you were going. How does that serve the 50% or more of the globe that doesn't have reliable electricity never mind internet? That aside the sad truth is we have no history of governments giving up mechanisms of control and Bitcoin will be no different. The UK just arrested a citizen serf for posting photos of himself with guns, photos that were taken in the U.S. Tyranny is on the rise globally and Trump is just a slowing of that trend here. You have Bitcoin because "they" let you have it but history teaches us that when they want us to give it up we will. Not all of us obviously but the vast majority. See guns in Australia and the UK.

---

You played dumb. I answered your question. Now you have moved the goalposts. If you don't believe me or don't get it, I don't have time to try to convince you, sorry.

---

I didn't move anything. You offered up a solution that's wholly impossible to implement. A world run on bitcoin is a pipe dream from the side of libertarians that have no understanding of the world as it is. I didn't think I needed to tell you the proposed solution had to be possible but apparently I did. So try again. Never in eleventy billion years will the governments of the world give up control over their currencies to a level sufficient to let the global economy run on bitcoin. It's 100% a ridiculous assumption with zero basis in history to believe otherwise. There will be global warfare before that happens. So let's be practical. What are the options?

---

I don't know if it will work but I think it is the best shot we have ever had. It comes down to game theory IMHO.

The game theory behind Bitcoin adoption doesn't rely on governments "giving up control" of fiat currency. Instead, it operates on parallel tracks where Bitcoin creates an alternative system that coexists with - and potentially outcompetes - government money over time.

Governments have monopoly power over their currencies, but monopolies can be disrupted when better alternatives emerge. Bitcoin's game theory works through network effects and individual incentives.

As more people adopt Bitcoin: 1) its liquidity increases, making it more useful; 2) its security strengthens (more miners = more computing power securing the network); and 3) its value becomes more stable through broader acceptance

Each new user makes the network more valuable for all existing users - this is Metcalfe's Law in action. The incentive for early adoption is the potential upside if Bitcoin succeeds as a global reserve asset.

Governments face their own prisoner's dilemma: if one major country embraces Bitcoin for strategic advantage (like securing energy exports or attracting capital), others may be forced to follow or risk being left behind. We're already seeing this with nation-state Bitcoin adoption.

The beauty is that no government can stop Bitcoin without shutting down the internet globally - and even then, the network could persist through satellite and mesh networks. The game theory suggests that as adoption grows, banning Bitcoin becomes increasingly costly politically and economically.

Bitcoin doesn't need to replace fiat entirely to succeed. It just needs to become important enough that governments must accommodate it rather than fight it - much like how governments initially resisted but eventually regulated and incorporated the internet.

The only reason to surrender to Bitcoin is if you have a government which controls Bitcoin. A government would never agree to that unless it was already beholden to the people that control Bitcoin. That also means the biggest holders of Bitcoin then control the governments that agree to use it as currency.


I don't think this ends the way Bitcoin Bootlickers will want it to. It is yet another idea that looks populist on the outside that shackles the masses to oligarchs

Windy City Ag said:

---

Quote:

---

The stock market has vastly underperformed gold since the SPX/GOLD ratio put in a high in 2000.

---

Right, because you are cherry-picking the most favorable comparison starting point in the history of the two asset classes.

Lets star the clock at 1975. . .a 50 year period.

Gold has returned less than 6% annually with a standard deviation of 18% for a Sharpe Ration of 0.36

The SPX has returned 12.5% annually since that period with much lower volatility.

---

It's not cherry picking. It's when the ratio topped. It was the peak of the bubble before we turned to full blown Keynesian debt-fueled currency destruction. It's literally the most relevant point.

Everything before that point is meaningless, as even though we had fully left the gold standard, we hadn't started fueling and monetizing the debt yet.. which is what CAUSED the 2008-current asset bubble.

Since we started monetizing the debt, stocks have vastly underperformed gold. And the gap is widening.

Jarrin Jay said:

---

That is obsolete thinking, still a problem of course but income tax doesn't even come close to covering the spending that is done due to issuance of debt. Taxes are already too high across the board and going higher. There is no amount of taxation that will ever cover the spending.

There is something in the OP post that most just gloss over, one of the biggest arguments to end the Fed is rarely talked about. The Fed does NOT buy US treasuries directly, but they buy from the big money center and national banks that do purchase them, and the Fed ALWAYS buy them. It is very hard to argue they are independent or even quasi-government. Essentially the government is issuing debt and buying it themselves. It's insane.

The Fed / govt. answer is always to just print more $$$, create more debt, we'll worry about the consequences later or never. It's not sustainable. A person, family or business cannot do that, a city, county or state cannot do it but for holes getting filled by the federal government. So when will it all fail? Nobody knows and economists can't give an answer how much is too much, but it will happen when the US goes to issue more treasuries and nobody buys it, that will crater the world economy and make the Great Depression seem like a spring picnic in the park.

What drove the housing financial crisis? "Quasi government" Fannie and Freddie buying billions and billions of $$ of mortgages / mortgage backed securities that banks did not want to hold on their books and the banks KNEW Fannie/Freddi would buy it all. Strip mall mortgage broker originates a mortgage, sells it to Chase or Citi who package it and sell it to Fannie/Freddie, zero accountability and thought of risk of loss along the entire chain as they knew it would get offloaded.

---

Forgive me but I've posted a lot on this thread. What is outdated thinking? I don't want to respond to the wrong thing. Broadly I agree with everything you posted after that comment, just want to make sure I don't miss something.

Its Texas Aggies, dammit said:

---

LOYAL AG said:

---

Its Texas Aggies, dammit said:

---

LOYAL AG said:

---

Its Texas Aggies, dammit said:

---

LOYAL AG said:

---

Its Texas Aggies, dammit said:

---

LOYAL AG said:

---

Burdizzo said:

---

That is a great recap of landmark events during that period. The irony is that the 16th, 17th, and Fed Reserve Act were largely responses to progressive and populist desires to empower the people. Instead what it did was removed economic freedom and shackled middle- and low- income Americans to the Federal Government

---

Interesting to hear how it was packaged at that time. It's difficult to discern whether the people selling that vision were sincere and just spectacularly wrong or if it was deception. We've known the evils of central banking for a very long time so I have a hard time believing that was just a good faith effort that went poorly. Jefferson said banking institutions are a greater threat to liberty than standing armies. It's not like this outcome couldn't have been predicted.

At this point the entire world is shackled to the federal government. Unwinding this mess would be extremely painful which is why I have zero hope that we'll ever do so willingly. It's gonna collapse because we won't do what's necessary to prevent it.

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I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop. - FRIEDRICH A. HAYEK

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I'm not aware of any history at all where the currency isn't managed by the government. Even the most anti-government founders in history didn't try and create a currency separate from the government they were creating. Not even sure how that would work. Am I misinterpreting that quote?

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Something with these characteristics might have a chance:

* Decentralized, peer-to-peer network architecture with no central authority or intermediary required for transactions
* Fixed and verifiable supply cap, making it inherently resistant to inflationary monetary policies
* Borderless and censorship-resistant transfer of value, operating outside the control of any single government or corporation
* Public, immutable, and cryptographically secured ledger that provides transparent transaction history for all participants
* Pseudonymous system that allows for financial interactions without mandatory personal identification
* Programmable monetary policy with rules enforced by code and network consensus, not human discretion
* Global settlement network that operates 24/7, requiring only an internet connection for participation

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I assumed that's where you were going. How does that serve the 50% or more of the globe that doesn't have reliable electricity never mind internet? That aside the sad truth is we have no history of governments giving up mechanisms of control and Bitcoin will be no different. The UK just arrested a citizen serf for posting photos of himself with guns, photos that were taken in the U.S. Tyranny is on the rise globally and Trump is just a slowing of that trend here. You have Bitcoin because "they" let you have it but history teaches us that when they want us to give it up we will. Not all of us obviously but the vast majority. See guns in Australia and the UK.

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You played dumb. I answered your question. Now you have moved the goalposts. If you don't believe me or don't get it, I don't have time to try to convince you, sorry.

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I didn't move anything. You offered up a solution that's wholly impossible to implement. A world run on bitcoin is a pipe dream from the side of libertarians that have no understanding of the world as it is. I didn't think I needed to tell you the proposed solution had to be possible but apparently I did. So try again. Never in eleventy billion years will the governments of the world give up control over their currencies to a level sufficient to let the global economy run on bitcoin. It's 100% a ridiculous assumption with zero basis in history to believe otherwise. There will be global warfare before that happens. So let's be practical. What are the options?

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I don't know if it will work but I think it is the best shot we have ever had. It comes down to game theory IMHO.

The game theory behind Bitcoin adoption doesn't rely on governments "giving up control" of fiat currency. Instead, it operates on parallel tracks where Bitcoin creates an alternative system that coexists with - and potentially outcompetes - government money over time.

Governments have monopoly power over their currencies, but monopolies can be disrupted when better alternatives emerge. Bitcoin's game theory works through network effects and individual incentives.

As more people adopt Bitcoin: 1) its liquidity increases, making it more useful; 2) its security strengthens (more miners = more computing power securing the network); and 3) its value becomes more stable through broader acceptance

Each new user makes the network more valuable for all existing users - this is Metcalfe's Law in action. The incentive for early adoption is the potential upside if Bitcoin succeeds as a global reserve asset.

Governments face their own prisoner's dilemma: if one major country embraces Bitcoin for strategic advantage (like securing energy exports or attracting capital), others may be forced to follow or risk being left behind. We're already seeing this with nation-state Bitcoin adoption.

The beauty is that no government can stop Bitcoin without shutting down the internet globally - and even then, the network could persist through satellite and mesh networks. The game theory suggests that as adoption grows, banning Bitcoin becomes increasingly costly politically and economically.

Bitcoin doesn't need to replace fiat entirely to succeed. It just needs to become important enough that governments must accommodate it rather than fight it - much like how governments initially resisted but eventually regulated and incorporated the internet.

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Thank you for that. I'm not convinced but I do appreciate the detailed explanation of how this could all play out. I guess I look at places like China. They aren't adopting bitcoin en masse in no small part because it's illegal. Unfortunately I see the whole world moving towards more authoritarian governance and the same digital world that makes bitcoin possible is the one they're leveraging to increase their control over us. If bitcoin were banned tomorrow and they had a Bitcoin buyback program how many millions of us would be willing to sell our coins to the government to comply with said ban? If they convinced us it was the currency of pedophiles and terrorists we would largely comply. Silly analogy but way too many of us comply with whatever the government asks us to do without thinking through the ripple effect.

What it comes down to for me is an extremely cynical perspective on the power of the U.S. government. We've long debated on F16 the demise of the dollar as the global reserve and my position has always been that as long as the U.S. Navy is responsible for security of all international shipping trade must be conducted in dollars so the trading nations can be confident their products arrive as promised. The U.S. Navy is the linchpin of the entire global economy and if you decide to trade in something other than dollars there's no guarantee we'll protect your vessels. That goes for Euro or Yuan, or Rubles. Or Bitcoin. Nobody can leave the dollar system because nobody is capable of providing their own security on the open seas. We see nations test the limits but nobody is leaving. We hold the world hostage.

To me it's that power that keeps me from thinking Bitcoin is ever more than digital gold. I'm disappointed I didn't buy in at $165 the first time someone I knew bought some but that aside I don't give it much thought. It exists because the nation that holds all the cards says it can.

My $.02. Good discussion.

Interesting thoughts. Does the decline of the British empire and navy also correlate to decline of the British pound as a reserve currency?

It's easy for government to stop bitcoin. Just make a purchase with it, and then arrest the person on the other side of the transaction.

After doing that a few times, businesses won't transact in bitcoin anymore.

Burdizzo said:

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Interesting thoughts. Does the decline of the British empire and navy also correlate to decline of the British pound as a reserve currency?

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Kind of. The pound really lost its status in part because by 1900 the U.S. had the world's largest economy though we weren't the largest navy at that time. Coming out of WWI the U.S. loaned out a significant amount of the money to rebuild and by the end of WWII the Brits were a borrower from us as well. At that point we had the only real navy as all others had been decimated and with Breton Woods we effectively took over and nobody could stop it. The European nations came to Breton Woods expecting to be told the post war world would be a U.S. centric colonial system and were shocked we just wanted to stop fighting and make money.

The biggest difference in the colonial days is that there were rival colonial systems so when a nation peaked there was a rival system with a comparable navy to take its place. As flawed as his conclusion is about the future of the dollar, the video Ray Dalio put together a few years ago does an excellent job laying out the history of reserve currencies and the transition from one to the other and why it happened. It essentially came down to a nation getting comfortable in its largesse and losing its determination to be on top, choosing instead to consume its own wealth and eventually being replaced by a rival nation that was hungrier. That loss of focus played out in a lot of ways, fiat currencies, economic inefficiency vis a vis social programs, and a weakened desire to fight for the homeland. With the fall of the pound it was more about us having the biggest economy and the only navy and everyone else needing massive amounts of cash to rebuild after the war. In other worlds the pounds demise was forced and we were the only game in town at that point.

The difference today is the nature of trade. It didn't exist like it does today, rather the colonial systems traded within themselves but rarely with each other. Those rivalries required all systems to maintain a navy capable of protecting their territories and trade vessels lest they be attacked by a rival. The world as we know it today where everyone trades with everyone else is a post WWII phenomenon created by the U.S. My conclusion has always been that until there's a rival system with the ability to trade independent of the U.S. Navy there can't be a replacement for the dollar. I think this is precisely China's thinking with Belt & Road, the ability to trade in a way that isn't reliant on us. It'll never work because over land shipping is too expensive but I give them an A for effort. This is also the thinking of the BRICS cheerleaders despite knowing all those nations rely on us to provide security for their trade ships.

Sorry for the wall of words.