[ExI] De-Orbiting Gold

[Mirco Romanato]

Il 21/05/2012 02:40, Brent Allsop ha scritto:

> All forms of money that are expensive are crap, from Gold, to coins, and
> especially if it is up in space. The only problem with money, is the
> inability to control how much of it there is, in any given society.
> Making it more expensive, or more rare, makes things far worse, and
> likely to be more volatile.

A commodity must have some features to be used as money:

The four primary characteristics of money are: (1) durability, (2) 
divisibility, (3) transportability, and (4) noncounterfeitability. 
Although a number of items or assets have served as money, those that 
best match these four characteristics are the ones that best function as 
money, the ones that best operate as a medium of exchange.

The quantity of money (or better, the quantity f the commodity used as 
money) is never a problem. The divisibility feature help a lot in this.

The problem with money (or better, with the commodity used as money) is 
how much is easy to counterfeit it. The government prefer paper money or 
electronic bits because they are easy to counterfeit. They counterfeit 
it because stealing purchaising power from the people is easier and 
often go unnoticed, laying the blame to others for the rising of good's 
prices.

More the commodity is costly, more difficult is to counterfeit it.
So, more costly it is, better it is.

You also want the commodity used as money to be not used much and to be 
easy to recycle. Gold have little use apart as money, jewelery and a few 
industrial applications. So the flow/supply ratio is very small.
Gold supply over ground is 70 times the yearly net production. This is 
important because the price of gold is determined mainly by the people 
owning it, not by the people mining it.

> Also, money needs to be VERY flexible.

Money need to be very unelastic. Totally rigid. It must not flex to the 
will or need of anyone. If you want money, you must work for it, not 
produce it with little effort. This because the increase in the quantity 
of money in any economic system is a damage for the purchaising power of 
the people. The people causing the increase are the people profiting 
from it.

> The herd goes in waves, where
> during boom times, everyone thinks they have far more wealth, than they
> really have, so this drives things, in a compounding way, to be even
> more bubbly.

Just because the heard, it need a negative feedback in the form of 
something impossible to inflate.
The housing bubble would be impossible without interest rates too much 
low. And the Fed. would be unable to keep the interest rates so low if 
they where forced to back their paper with gold. They would end their 
gold long before the housing bubble was able to form. The same is true 
for the Dot.Com bubble and the current commodities bubble.
There would not be import/export imbalances, if countries were forced to 
pay in gold/silver to import stuff. They would be able to import exactly 
as much they export (priced in gold) and they would be able to export as 
much the import.

> And when the bubble pops, the herd swings way to the far
> other extreme, thinking they are far more poor than they really are,
> becoming a self fulfilling prophesy. Being on a "gold standard" can
> really work in the opposite way that it needs to, depending on how much
> we find, and how much is being consumed, at any given time.

Under a gold standard would be impossible to create a series of bubbles 
so big. As gold flew to housing, it would withdraw from other assets. So 
the production of these assets would reduce and the consumption increase 
as the price fall.

Take away the printing presses and the bank's fractional reserve system 
and you take away 90% of the existing credit (at least). And with the 
credit, you will reduce the demand and with the demand, the price of 
things would fall (making them much more affordable than now).

Better have an higher interest rates and low prices than the reverse, 
because with an higher interest rates people is interested in saving and 
is able to pay the stuff they buy long before than today.

> You desperately need to have a controlling institution, that can be very
> flexible, and create money very cheaply, to fund governmental like
> projects to help when this happens, and do the opposite when bubbles are
> forming.

They never, ever, do the opposite when bubbles are forming.
Their intervention is what cause the bubbles to form.
They help to make them much bigger, because this help them to stay in 
power and profit from speculations with cheap money.

Controlling institutions are what put people in shantytowns, in showers 
and then in ovens. Humans don't need controlling, they need freedom and 
the responsibility of themselves.

> Right now, we have a reasonably good way of doing this, (at least better
> than the gold standard, or any other more primitive method used in the
> past) via the Federal reserve, under the direction of someone like
> Bernanke.

If you are really thinking this, I want to know what are you smoking. It 
must be very strong stuff.

Bernanke, Draghi, Monti, they are technocrats selling the illusion of 
their competence and the illusion of their ability to control what no 
human is able to control: the economy.

This is because after February 1, 2006 until today Bernanke have so much 
accomplishments to show. Nothing good.
The power of the printing presses is his only power and all the paper 
and bit he could print out of thin air will not change the current 
economy. At best he is able to delay the inevitable reckoning making it 
bigger and more damaging.
If you go to YouTube you could be able to find Helicopter Ben declaring 
there is no housing bubble and there are no problems just before the 
bubbles popped.

> In my opinion, Bernanke, and his flooding the system with
> money, is what kept us from making the same mistake of the last
> generation, and why today we only have "the great rescission" when the
> last generation had "the great depression".

If you are a bit more patient you will see "The Greatest Depression" 
before the end of this decades, probably before a few years.
Just now the US$ is the pavlovian safe haven of investors of other 
countries in turmoil (the EU mainly). Wait until the dust settle in the 
EU; after the Euro break up, it is the timeof the US$ crack-up boom.

> Now, if we could have something way more intelligent and trustworthy,
> than Bernanke, perhaps an amplification of the wisdom of the expert
> crowd survey system, like canonizer.com, we could implement a completely
> free monetary system - with completely freely created money, enabling us
> to get to the millennium that much faster. And we wouldn't need a
> government or any other big institution to 'back it up'.

I stopped to belive in Santa Claus many many years ago, at a very young 
age. I think you stopped believeing in him but want substitute Santa (or 
the Tooth Fairy) with canonizer.com.

> And as far as anything in space, like what is the maximum size of
> something in space we could de-orbit, all of that is moot, and all of it
> is dangerous. Anything we put in orbit, money or whatever, could come
> crashing down, and it's only a matter of time before yet another person
> is doomed to eternally rotting in the grave, when they could potentially
> make it to the millennium.

The current gravest danger for people is the meddling of governments and 
central bankers (and their cronies in the finance). They are destoying 
wealth and forcing people to a life of servitude to service the debts 
the people was forced or enticed to do.

> Again, instead of focusing on space, we should be focusing on the brain,
> so we can have sooner have backups and uploads of everyone. Then we can
> de-orbat anything we want. If we goof, we just restore everyone from
> backups, no big deal.

Again, if we focused on brain before we would not have the computers and 
without the Microsoft we would not have Mr. Paul Allen financing the 
Brain Atlas and the XPrice.

With billionaries investing in space we have people able in future to 
command hundred of billion in research. If Paul Allen had 30 trillions 
instead of 30 billions of personal wealth he could finance much larger 
research projects and many more research.

I think was Moravec writing that you could have one large team of the 
best minds financed with x millions of hardware working for ten years or 
ten medium/small team financed with the same money working one year (if 
you wait nine years for the hardware to become cheaper).
At the end the research is like a lottery, more tickets (research and 
researcher) you are able to buy, higher is the chance to success.

> Does anyone think Elon is ever going to go up in one of his rockets, and
> risk a chance at making it to the millennium? Would any similarly rich
> trans-humanist ever risk that, especially the closer we get to the
> millennium?

This is their business, not your, not mine.

> You've got to do first things first.

You go to do your first things first.
Let others do their first things first.
It is their wealth, their life.

> Everything else just condemns that
> many more people to eternally rotting in the hell that is the grave, or
> worse, complete obliteration in space.

I don't think you are really worring about other people.
You want live forever, you fear to be unable to do so.
And you want others to pay for your eternity ticket.

Mirco