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Meet Brock Pierce, the Presidential Candidate With Ties to Pedophiles Who Wants to End Human Trafficking
thedailybeast.com | Sep. 20, 2020. The “Mighty Ducks” actor is running for president. He clears the air (sort of) to Tarpley Hitt about his ties to Jeffrey Epstein and more. In the trailer for First Kid, the forgettable 1996 comedy about a Secret Service agent assigned to protect the president’s son, the title character, played by a teenage Brock Pierce, describes himself as “definitely the most powerful kid in the universe.” Now, the former child star is running to be the most powerful man in the world, as an Independent candidate for President of the United States. Before First Kid, the Minnesota-born actor secured roles in a series of PG-rated comedies, playing a young Emilio Estevez in The Mighty Ducks, before graduating to smaller parts in movies like Problem Child 3: Junior in Love. When his screen time shrunk, Pierce retired from acting for a real executive role: co-founding the video production start-up Digital Entertainment Network (DEN) alongside businessman Marc Collins-Rector. At age 17, Pierce served as its vice president, taking in a base salary of $250,000. DEN became “the poster child for dot-com excesses,” raising more than $60 million in seed investments and plotting a $75 million IPO. But it turned into a shorthand for something else when, in October of 1999, the three co-founders suddenly resigned. That month, a New Jersey man filed a lawsuit alleging Collins-Rector had molested him for three years beginning when he was 13 years old. The following summer, three teens filed a sexual-abuse lawsuit against Pierce, Collins-Rector, and their third co-founder, Chad Shackley. The plaintiffs later dropped their case against Pierce (he made a payment of $21,600 to one of their lawyers) and Shackley. But after a federal grand jury indicted Collins-Rector on criminal charges in 2000, the DEN founders left the country. When Interpol arrested them in 2002, they said they had confiscated “guns, machetes, and child pornography” from the trio’s beach villa in Spain. While abroad, Pierce had pivoted to a new venture: Internet Gaming Entertainment, which sold virtual accessories in multiplayer online role-playing games to those desperate to pay, as one Wired reporter put it, “as much as $1,800 for an eight-piece suit of Skyshatter chain mail” rather than earn it in the games themselves. In 2005, a 25-year-old Pierce hired then-Goldman Sachs banker Steve Bannon—just before he would co-found Breitbart News. Two years later, after a World of Warcraft player sued the company for “diminishing” the fun of the game, Steve Bannon replaced Pierce as CEO. Collins-Rector eventually pleaded guilty to eight charges of child enticement and registered as a sex offender. In the years that followed, Pierce waded into the gonzo economy of cryptocurrencies, where he overlapped more than once with Jeffrey Epstein, and counseled him on crypto. In that world, he founded Tether, a cryptocurrency that bills itself as a “stablecoin,” because its value is allegedly tied to the U.S. dollar, and the blockchain software company Block.one. Like his earlier businesses, Pierce’s crypto projects see-sawed between massive investments and curious deals. When Block.one announced a smart contract software called EOS.IO, the company raised $4 billion almost overnight, setting an all-time record before the product even launched. The Securities and Exchange Commission later fined the company $24 million for violating federal securities law. After John Oliver mocked the ordeal, calling Pierce a “sleepy, creepy cowboy,” Block.one fired him. Tether, meanwhile, is currently under investigation by the New York Attorney General for possible fraud. On July 4, Pierce announced his candidacy for president. His campaign surrogates include a former Cambridge Analytica director and the singer Akon, who recently doubled down on developing an anonymously funded, $6 billion “Wakanda-like” metropolis in Senegal called Akon City. Pierce claims to be bipartisan, and from the 11 paragraphs on the “Policy” section of his website it can be hard to determine where he falls on the political spectrum. He supports legalizing marijuana and abolishing private prisons, but avoids the phrase “climate change.” He wants to end “human trafficking.” His proposal to end police brutality: body cams. His political contributions tell a more one-sided story. Pierce’s sole Democratic contribution went to the short-lived congressional run of crypto candidate Brian Forde. The rest went to Republican campaigns like Marco Rubio, Rick Perry, John McCain, and the National Right to Life Political Action Committee. Last year alone, Pierce gave over $44,000 to the Republican National Committee and more than $55,000 to Trump’s re-election fund. Pierce spoke to The Daily Beast from his tour bus and again over email. Those conversations have been combined and edited for clarity. You’re announcing your presidential candidacy somewhat late, and historically, third-party candidates haven’t had the best luck with the executive office. If you don’t have a strong path to the White House, what do you want out of the race? I announced on July 4, which I think is quite an auspicious date for an Independent candidate, hoping to bring independence to this country. There’s a lot of things that I can do. One is: I’m 39 years old. I turn 40 in November. So I’ve got time on my side. Whatever happens in this election cycle, I’m laying the groundwork for the future. The overall mission is to create a third major party—not another third party—a third major party in this country. I think that is what America needs most. George Washington in his closing address warned us about the threat of political parties. John Adams and the other founding fathers—their fear for our future was two political parties becoming dominant. And look at where we are. We were warned. I believe, having studied systems, any time you have a system of two, what happens is those two things come together, like magnets. They come into collision, or they become polarized and become completely divided. I think we need to rise above partisan politics and find a path forward together. As Albert Einstein is quoted—I’m not sure the line came from him, but he’s quoted in many places—he said that the definition of insanity is making the same mistake or doing the same thing over and over and over again, expecting a different result. [Ed. note: Einstein never said this.] It feels like that’s what our election cycle is like. Half the country feels like they won, half the country feels like they lost, at least if they voted or participated. Obviously, there’s another late-comer to the presidential race, and that’s Kanye West. He’s received a lot of flak for his candidacy, as he’s openly admitted to trying to siphon votes away from Joe Biden to ensure a Trump victory. Is that something you’re hoping to avoid or is that what you’re going for as well? Oh no. This is a very serious campaign. Our campaign is very serious. You’ll notice I don’t say anything negative about either of the two major political candidates, because I think that’s one of the problems with our political system, instead of people getting on stage, talking about their visionary ideas, inspiring people, informing and educating, talking about problems, mentioning problems, talking about solutions, constructive criticism. That’s why I refuse to run a negative campaign. I am definitely not a spoiler. I’m into data, right? I’m a technologist. I’ve got digital DNA. So does most of our campaign team. We’ve got our finger on the pulse. Most of my major Democratic contacts are really happy to see that we’re running in a red state like Wyoming. Kanye West’s home state is Wyoming. He’s not on the ballot in Wyoming I could say, in part, because he didn’t have Akon on his team. But I could also say that he probably didn’t want to be on the ballot in Wyoming because it’s a red state. He doesn’t want to take additional points in a state where he’s only running against Trump. But we’re on the ballot in Wyoming, and since we’re on the ballot in Wyoming I think it’s safe—more than safe, I think it’s evident—that we are not here to run as a spoiler for the benefit of Donald Trump. In running for president, you’ve opened yourself up to be scrutinized from every angle going back to the beginning of your career. I wanted to ask you about your time at the Digital Entertainment Network. Can you tell me a little bit about how you started there? You became a vice president as a teenager. What were your qualifications and what was your job exactly? Well, I was the co-founder. A lot of it was my idea. I had an idea that people would use the internet to watch videos, and we create content for the internet. The idea was basically YouTube and Hulu and Netflix. Anyone that was around in the ‘90s and has been around digital media since then, they all credit us as the creators of basically those ideas. I was just getting a message from the creator of The Vandals, the punk rock band, right before you called. He’s like, “Brock, looks like we’re going to get the Guinness Book of World Records for having created the first streaming television show.” We did a lot of that stuff. We had 30 television shows. We had the top most prestigious institutions in the world as investors. The biggest names. High-net-worth investors like Terry Semel, who’s chairman and CEO of Warner Brothers, and became the CEO of Yahoo. I did all sorts of things. I helped sell $150,000 worth of advertising contracts to the CEOs of Pepsi and everything else. I was the face of the company, meeting all the major banks and everything else, selling the vision of what the future was. You moved in with Marc Collins-Rector and Chad Shackley at a mansion in Encino. Was that the headquarters of the business? All start-ups, they normally start out in your home. Because it’s just you. The company was first started out of Marc’s house, and it was probably there for the first two or three months, before the company got an office. That’s, like, how it is for all start-ups. were later a co-defendant in the L.A. County case filed against Marc Collins-Rector for plying minors with alcohol and drugs, in order to facilitate sexual abuse. You were dropped from the case, but you settled with one of the men for $21,600. Can you explain that? Okay, well, first of all, that’s not accurate. Two of the plaintiffs in that case asked me if I would be a plaintiff. Because I refused to be a part of the lawsuit, they chose to include me to discredit me, to make their case stronger. They also went and offered 50 percent of what they got to the house management—they went around and offered money to anyone to participate in this. They needed people to corroborate their story. Eventually, because I refused to participate in the lawsuit, they named me. Subsequently, all three of the plaintiffs apologized to me, in front of audiences, in front of many people, saying Brock never did anything. They dismissed their cases. Remember, this is a civil thing. I’ve never been charged with a crime in my life. And the last plaintiff to have his case dismissed, he contacted his lawyer and said, “Dismiss this case against Brock. Brock never did anything. I just apologized. Dismiss his case.” And the lawyer said, “No. I won’t dismiss this case, I have all these out-of-pocket expenses, I refuse to file the paperwork unless you give me my out-of-pocket expenses.” And so the lawyer, I guess, had $21,000 in bills. So I paid his lawyer $21,000—not him, it was not a settlement. That was a payment to his lawyer for his out-of-pocket expenses. Out-of-pocket expenses so that he would file the paperwork to dismiss the case. You’ve said the cases were unfounded, and the plaintiffs eventually apologized. But your boss, Marc Collins-Rector later pleaded guilty to eight charges of child enticement and registered as a sex offender. Were you aware of his behavior? How do you square the fact that later allegations proved to be true, but these ones were not? Well, remember: I was 16 and 17 years old at the time? So, no. I don’t think Marc is the man they made him out to be. But Marc is not a person I would associate with today, and someone I haven’t associated with in a very long time. I was 16 and 17. I chose the wrong business partner. You live and you learn. You’ve pointed out that you were underage when most of these allegations were said to take place. Did you ever feel like you were coerced or in over your head while working at DEN? I mean, I was working 18 hours a day, doing things I’d never done before. It was business school. But I definitely learned a lot in building that company. We raised $88 million. We filed our [form] S-1 to go public. We were the hottest start-up in Los Angeles. In 2000, you left the country with Marc Collins-Rector. Why did you leave? How did you spend those two years abroad? I moved to Spain in 1999 for personal reasons. I spent those two years in Europe working on developing my businesses. Interpol found you in 2002. The house where you were staying reportedly contained guns, machetes, and child pornography. Whose guns and child porn were those? Were you aware they were in the house, and how did those get there? My lawyers have addressed this in 32 pages of documentation showing a complete absence of wrongdoing. Please refer to my webpage for more information. [Ed. Note: The webpage does not mention guns, machetes, or child pornography. It does state:“It is true that when the local police arrested Collins-Rector in Spain in 2002 on an international warrant, Mr. Pierce was also taken into custody, but so was everyone at Collins-Rector’s house in Spain; and it is equally clear that Brock was promptly released, and no charges of any kind were ever filed against Brock concerning this matter.”] What do you make of the allegations against Bryan Singer?[Ed. Note: Bryan Singer, a close friend of Collins-Rector, invested at least $50,000 in DEN. In an Atlantic article outlining Singer’s history of alleged sexual assault and statutory rape, one source claimed that at age 15, Collins-Rector abused him and introduced him to Singer, who then assaulted him in the DEN headquarters.] I am aware of them and I support of all victims of sexual assault. I will let America’s justice system decide on Singer’s outcome.
In 2011, you spoke at the Mindshift conference supported by Jeffrey Epstein. At that point, he had already been convicted of soliciting prostitution from a minor. Why did you agree to speak? I had never heard of Jeffrey Epstein. His name was not on the website. I was asked to speak at a conference alongside Nobel Prize winners. It was not a cryptocurrency conference, it was filled with Nobel Prize winners. I was asked to speak alongside Nobel Prize winners on the future of money. I speak at conferences historically, two to three times a week. I was like, “Nobel Prize winners? Sounds great. I’ll happily talk about the future of money with them.” I had no idea who Jeffrey Epstein was. His name was not listed anywhere on the website. Had I known what I know now? I clearly would have never spoken there. But I spoke at a conference that he cosponsored. What’s your connection to the Clinton Global Initiative? Did you hear about it through Jeffrey Epstein? I joined the Clinton Global Initiative as a philanthropist in 2006 and was a member for one year. My involvement with the Initiative had no connection to Jeffrey Epstein whatsoever.
You’ve launched your campaign in Minnesota, where George Floyd was killed by a police officer. How do you feel about the civil uprising against police brutality? I’m from Minnesota. Born and raised. We just had a press conference there, announcing that we’re on the ballot. Former U.S. Senator Dean Barkley was there. So that tells you, when former U.S. Senators are endorsing the candidate, right? [Ed. note: Barkley was never elected to the United States Senate. In November of 2002, he was appointed by then Minnesota Governor Jesse Venture to fill the seat after Sen. Paul Wellstone died in a plane crash. Barkley’s term ended on Jan. 3, 2003—two months later.] Yes, George Floyd was murdered in Minneapolis. My vice-presidential running mate Karla Ballard and I, on our last trip to Minnesota together, went to visit the George Floyd Memorial. I believe in law and order. I believe that law and order is foundational to any functioning society. But there is no doubt in my mind that we need reform. These types of events—this is not an isolated incident. This has happened many times before. It’s time for change. We have a lot of detail around policy on this issue that we will be publishing next week. Not just high-level what we think, not just a summary, but detailed policy. You said that you support “law and order.” What does that mean? “Law and order” means creating a fair and just legal system where our number one priority is protecting the inalienable rights of “Life, Liberty and the pursuit of Happiness” for all people. This means reforming how our police intervene in emergency situations, abolishing private prisons that incentivize mass incarceration, and creating new educational and economic opportunities for our most vulnerable communities. I am dedicated to preventing crime by eliminating the socioeconomic conditions that encourage it. I support accountability and transparency in government and law enforcement. Some of the key policies I support are requiring body-cams on all law enforcement officers who engage with the public, curtailing the 1033 program that provides local law enforcement agencies with access to military equipment, and abolishing private prisons. Rather than simply defund the police, my administration will take a holistic approach to heal and unite America by ending mass incarceration, police brutality, and racial injustice. Did you attend any Black Lives Matter protests? I support all movements aimed at ending racial injustice and inequality. I have not attended any Black Lives Matter protests. My running-mate, Karla Ballard, attended the March on Washington in support of racial justice and equality. Your platform doesn’t mention the words “climate change.” Is there a reason for that? I’m not sure what you mean. Our policy platform specifically references human-caused climate change and we have a plan to restabilize the climate, address environmental degradation, and ensure environmental sustainability. [Ed. Note: As of writing the Pierce campaign’s policy platform does not specifically reference human-caused climate change.] You’ve recently brought on Akon as a campaign surrogate. How did that happen? Tell me about that. Akon and I have been friends for quite some time. I was one of the guys that taught him about Bitcoin. I helped make some videogames for him, I think in 2012. We were talking about Bitcoin, teaching him the ropes, back in 2013. And in 2014, we were both speaking at the Milken Global Conference, and I encouraged him to talk about how Bitcoin, Africa, changed the world. He became the biggest celebrity in the world, talking about Bitcoin at the time. I’m an adviser to his Akoin project, very interested in the work that he’s doing to build a city in Africa. I think we need a government that’s of, for, and by the people. Akon has huge political aspirations. He obviously was a hugely successful artist. But he also discovered artists like Lady Gaga. So not only is he, himself, a great artist, but he’s also a great identifier and builder of other artists. And he’s been a great businessman, philanthropist. He’s pushing the limits of what can be done. We’re like-minded individuals in that regard. I think he’ll be running for political office one day, because he sees what I see: that we need real change, and we need a government that is of, for, and by the people. You mentioned that you’re an adviser on Akoin. Do you have any financial investments in Akoin or Akon City? I don’t believe so. I’d have to check. I have so much stuff. But I don’t believe that I have any economic interests in his stuff. I’d have to verify that. We’ll get back to you. I don’t believe that I have any economic interests. My interest is in helping him. He’s a visionary with big ideas that wants to help things in the world. If I can be of assistance in helping him make the world a better place, I’m all for it. I’m not motivated by money. I’m not running for office because I’m motivated by power. I’m running for office because I’m deeply, deeply concerned about our collective future. You’ve said you’re running on a pro-technology platform. One week into your campaign last month, a New York appeals court approved the state Attorney General’s attempt to investigate the stablecoin Tether for potentially fraudulent activity. Do you think this will impact your ability to sell people on your tech entrepreneurship? No, I think my role in Tether is as awesome as it gets. It was my idea. I put it together. But I’ve had no involvement in the company since 2015. I gave all of my equity to the other shareholders. I’ve had zero involvement in the company for almost six years. It was just my idea. I put the initial team together. But I think Tether is one of the most important innovations in the world, certainly. The idea is, I digitized the U.S. dollar. I used technology to digitize currency—existing currency. The U.S. dollar in particular. It’s doing $10 trillion a year. Ten trillion dollars a year of transactional volume. It’s probably the most important innovation in currency since the advent of fiat money. The people that took on the business and ran the business in years to come, they’ve done things I’m not proud of. I’m not sure they’ve done anything criminal. But they certainly did things differently than I would do. But it’s like, you have kids, they turn 18, they go out into the world, and sometimes you’re proud of the things they do, and sometimes you shake your head and go, “Ugh, why did you do that?” I have zero concerns as it relates to me personally. I wish they made better decisions. What do you think the investigation will find? I have no idea. The problem that was raised is that there was a $5 million loan between two entities and whether or not they had the right to do that, did they disclose it correctly. There’s been no accusations of, like, embezzlement or anything that bad. [Ed. Note: The Attorney General’s press release on the investigation reads: “Our investigation has determined that the operators of the ‘Bitfinex’ trading platform, who also control the ‘tether’ virtual currency, have engaged in a cover-up to hide the apparent loss of $850 million dollars of co-mingled client and corporate funds.”] But there’s been some disclosure things, that is the issue. No one is making any outrageous claims that these are people that have done a bunch of bad—well, on the internet, the media has said that the people behind the business may have been manipulating the price of Bitcoin, but I don’t think that has anything to do with the New York investigation. Again, I’m so not involved, and so not at risk, that I’m not even up to speed on the details. [Ed note: A representative of the New York State Attorney General told Forbes that he “cannot confirm or deny that the investigation” includes Pierce.] We’ve recently witnessed the rise of QAnon, the conspiracy theory that Hollywood is an evil cabal of Satanic pedophiles and Trump is the person waging war on them. You mentioned human trafficking, which has become a cause for them. What are your thoughts on that? I’ve watched some of the content. I think it’s an interesting phenomenon. I’m an internet person, so Anonymous is obviously an organization that has been doing interesting stuff. It’s interesting. I don’t have a big—conspiracy theory stuff is—I guess I have a question for you: What do you think of all of it, since you’re the expert? You know, I think it’s not true, but I’m not running for president. I do wonder what this politician [Georgia congressional candidate Marjorie Taylor Greene], who’s just won her primary, is going to do on day one, once she finds out there’s no satanic cabal room. Wait, someone was running for office and won on a QAnon platform, saying that Hollywood did—say what? You’re the expert here. She won a primary. But I want to push on if we only have a few minutes. In 2006, your gaming company IGE brought on Steve Bannon as an investor. Goldman later bought out most of your stock. Bannon eventually replaced you as CEO of Affinity. You’ve described him as your “right-hand man for, like, seven years.” How well did you know Bannon during that time? Yes, so this is in my mid-twenties. He wasn’t an investor. He worked for me. He was my banker. He worked for me for three years as my yield guide. And then he was my CEO running the company for another four years. So I haven’t worked with Steve for a decade or so. We worked in videogame stuff and banking. He was at Goldman Sachs. He was not in the political area at the time. But he was a pretty successful banker. He set up Goldman Sachs Los Angeles. So for me, I’d say he did a pretty good job. During your business relationship, Steve Bannon founded Breitbart News, which has pretty consistently published racist material. How do you feel about Breitbart? I had no involvement with Breitbart News. As for how I feel about such material, I’m not pleased by any form of hate-mongering. I strongly support the equality of all Americans. Did you have qualms about Bannon’s role in the 2016 election? Bannon’s role in the Trump campaign got me to pay closer attention to what he was doing but that’s about it. Whenever you find out that one of your former employees has taken on a role like that, you pay attention. Bannon served on the board of Cambridge Analytica. A staffer on your campaign, Brittany Kaiser, also served as a business director for them. What are your thoughts on their use of illicitly-obtained Facebook data for campaign promotional material? Yes, so this will be the last question I can answer because I’ve got to be off for this 5:00 pm. But Brittany Kaiser is a friend of mine. She was the whistleblower of Cambridge Analytica. She came to me and said, “What do I do?” And I said, “Tell the truth. The truth will set you free.” [Ed. Note: Investigations in Cambridge Analytica took place as early as Nov. 2017, when a U.K. reporter at Channel 4 News recorded their CEO boasting about using “beautiful Ukranian girls” and offers of bribes to discredit political officials. The first whistleblower was Christopher Wylie, who disclosed a cache of documents to The Guardian, published on Mar. 17, 2018. Kaiser’s confession ran five days later, after the scandal made national news. Her association with Cambridge Analytica is not mentioned anywhere on Pierce’s campaign website.] So I’m glad that people—I’m a supporter of whistleblowers, people that see injustice in the world and something not right happening, and who put themselves in harm’s way to stand up for what they believe in. So I stand up for Brittany Kaiser. Who do you think [anonymous inventor of Bitcoin] Satoshi Nakamoto is? We all are Satoshi Nakamoto. You got married at Burning Man. Have you been attending virtual Burning Man? I’m running a presidential campaign. So, while I was there in spirit, unfortunately my schedule did not permit me to attend. OP note: please refer to the original article for reference links within text (as I've not added them here!)
Bitcoin Falls Below $8,000; The Entire Crypto Sector Plunges
The #1 Cryptocurrency Has Now A Geopolitical Influence The coronavirus outbreak and the war forming in the crude oil sector managed to impact cryptocurrencies. The recent oil war may have caused the wipe-off of 15% of the total market capitalization in the crypto sector. Bitcoin, the world’s leading cryptocurrency, seems to have taken the impact severely, after a week of price consolidation. The world’s #1 crypto plunged down, losing over $1,000 over the course of the past 24 hours alone. Weekly, the top crypto collapsed from $9,167.70 to trade at $7,866.49 as of press time. Bitcoin initially started falling on Friday, March 6, but the weekend rally mitigated the consequences of the downward push. Despite the $9,192 high on Saturday, the bulls bent under the resistance, and Bitcoin started its rollercoaster start of the week. Bitcoin’s fall to serve as a safe-haven for investors took the entire crypto sector down, with some of the top-10 cryptocurrencies recording double-digit losses. Ethereum (ETH), for example, is down 10,43% to trade at $203,29 as of press time. Ripple (XRP) recorded an 8% price decrease, touching the psychological barrier of $0,20, selling at $0,208826. Bitcoin Cash (BCH) lost 13 percent of its price, to currently trade at $273.3, while the only gainer in the top-20 is LEO with a mere two-percent price increase. Trading volumes, however, are increasing, indicating stability and possible price increase in the following days. The primary cause for the crypto market plunge remains unclear. However, some crypto experts believe the price drop has some kind of correlation to the more significant stock market turmoil, which caused market havoc. The primary catalyst, according to the experts, is the tension between Saudi Arabia and Russia, after both parties failed to come to a consensus about reducing crude oil productions. Тhis is happening to act against weaker oil demand as a result of the nCoV-19 outbreak. Shortly after Saudi Arabia’s decision to keep the current levels of oil production, major U.S. indexes like Dow and S&P 500 took a 5% hit. The recent price Bitcoin price fluctuations broke the arguments of crypto enthusiasts for Bitcoin becoming a safe-haven asset, like physical gold. Nouriel Roubini, who is a Nobel prize laureate in the field of economics, commented on the latest crypto price downfalls.
Original post from blog.projectpiglet.com. However, because there is promotional activity, a text post was more appropriate, thank you Mod's for working with me.
Pitfalls of Granger Causality
One of the most common forms of analysis on the stock market is Granger Causality, which is a method for indicating one signal possibly causes another signal. This type of causality is often called “predictive causality”, as it does not for certain determine causality – it simply determines correlations at various time intervals. Why Granger Causality? If you search “causality in the stock market“, you’ll be greeted with a list of links all mentioning “granger causality”: Search on DuckDuckGo In other words, it’s popular and Clive Granger won a Nobel on the matter. That being said, there are quite a few limitations. In this article, we’ll be covering a brief example of Granger Causality, as well as some of the common pitfalls and how brittle it can be.
What is Granger Causality?
Granger Causality (from Wikipedia) is defined as:
A time series X is said to Granger-cause Y if it can be shown, usually through a series of t-tests and F-tests on lagged values of X (and with lagged values of Y also included), that those X values provide statistically significant information about future values of Y.
In other words, Granger Causality is the analysis of trying to find out if one signal impacts another signal (such that it’s statistically significant). Pretty straightforward, and is even clearer with an image: From Wikipedia n a sense, it’s just one spike in a graph causing another spike at a later time. The real challenge with this is that this needs to be consistent. It has to repeatedly do this over the source of the entire dataset. This brings us to the next part: one of the fragile aspects of this method is that it often doesn’t account for seasonality.
Granger Causality and Seasonality
One common aspect of markets is that they are seasonal. Commodities (as it relates to the futures market) related to food are extremely impacted by seasonality. For instance, if there is a drought across Illinois and Indiana during the summer (killing the corn crop), then corn prices from Iowa would likely rise (i.e. the corn from Iowa would be worth more). From Wikipedia In the example, there may be decades where some pattern in the market holds and Granger Causality is relevant. For instance, during summer heat waves in Illinois, corn prices in Iowa increase. On the other hand, with the advent of irrigation methods that deliver water underground, heat waves may no longer impact crops. Thus, the causality of heat waves in Illinois may no longer impact the corn prices in Iowa. If we then attempt to search for Granger Causality on the entire time range (a) pre-irrigation and (b) post irrigation, we will find there is no causality! However, during the pre-irrigation time range we will find probable causality, and for post-irrigation time range we likely won’t find probable causality. Any time you combine two timeframes like this, the default is no Granger Causality (unless it’s a very small portion of the dataset). Bringing us to the conclusion, that:
Granger Causality is very sensitive to timeframe(s)
Just a few data points in either direction can break the analysis. This makes sense, as it is a way to evaluate if two time series are related. However, it does lead one to note how brittle this method can be.
Granger Causality and Sparse Datasets
Yet another potential issue with Granger Causality is sparse datasets. Let’s say we have dataset X and dataset Y: if dataset X has 200 data points and data set Y as 150 data points, how do you merge them? Assuming they are in (datetime, value) format, if we do an inner join on “datetime”, we get something that looks like the following: From W3School Then we will have 150 data points in a combined X and Y dataset, i.e.: (datetime, x, y). Unforunately, this also means if the data is continuous (as most timeseries data is), then we have completely broke our Granger Causality analysis. In other words, we are just skipping over days, which would break any causality analysis. In contrast, we could do an outer join: From W3School We will have 200 data points in a combined X and Y dataset. Again, there’s an issue – it means we probably have empty values (Null, NULL, None, NaN, etc. ) where the Y data set didn’t have data (recall Y only had 150 data points). The dataset would then have various entries that look as such: (datetime, x, NULL). To fix the empty values, we can attempt to use a forward or back fill technique. A forward/back fill technique is where you fill all the empty values with the previous or following location(s) real value. This code could look like the following: From blog.projectpiglet.com From the sound of it, this method sounds promising! You’ll end up with something that’s continuous with all real values. You’ll actually get a graph like this: Change in BCH price vs Random Walk (with NaNs) As you can see, there are large sections of time where the data is flat. Recall the seasonality issue with Granger Causality? This method of outer joins + forward / back filling will definitely cause issues, and lead to minimal to no meaningful correlations. Sparse datasets make it very difficult (or impossible) to identify probable causality.
Granger Causality and Resampling
There is another option for us, and that is “resampling”. Where instead of just filling the empty values (Nulls / NaNs) with the previous or following real values, we actually resample the whole series). Resampling is a technique where we fill the holes in the data with what amounts to a guess of what we think the data could be. Although there are quite a few techniques, in this example we’ll use the python package Scipy, with the Signal module. From blog.projectpiglet.com At first glance, this appears to have solved some of the issues: Change in Bitcoin Price vs Random Walk However, in reality it does not work; especially if the dataset starts or ends with NaN’s (at least when using the Scipy package): Change in BCH price vs Random Walk (with NaNs) If you notice, prior to the ~110 data point, the values are just oscillating up and down. The resampling method Scipy is using does not appear to be functional / practical with so few data points. This is because I selected data set for Bitcoin Cash (BCH) and the date range is prior to Bitcoin Cash (BCH) becoming a currency (i.e. there is no price information). In a sense, this indicates it’s not possible (at least given the data provided) to attempt Granger Causality on the given date ranges. Small gaps in time can have dramatic impacts on whether or not “probable causality” exists.
When determining Granger Causaily it is extremely important to have two complete overlapping datasets.
Without two complete datasets, it’s impossible to identify whether or not there are correlations over various time ranges.
Resampling can cause artifacts that impact the Granger Causality method(s).
In fact, the most recent example was actually positive for Granger Causality (p-value < 0.05)… That is the worst scenario, as it is a false positive. In the example, the false positive occurs because when both datasets are resampled they had a matching oscillation… it wouldn’t have even been noticed if the raw data sets weren’t being reviewed. This is probably the largest issue with Granger Causality: every dataset needs to be reviewed to see if it makes sense. Sometimes what at first appears to make sense, in reality the underlying data has been altered in some way (such as resampling).
Granger Causality and Non-Linear Regression
Changing gears a bit (before we get to a real-world ProjectPiglet.com example), it’s important to note that most Granger Causality uses linear regression. In other words, the method is searching for linear correlations between datasets: From austingwalters.com However, in many cases – especially in the case of markets – correlations are highly likely to benon-linear. This is because markets are anti-inductive. In other words, every pattern discovered in a market creates a new pattern as people exploit that inefficiency. This is called the Efficient Market Hypothesis. Ultimately, this means most implementations of Granger Causality are overly simplistic; as most correlations are certainly non-linear in nature. There are a large number of non-linear regression models, below is an example of Gaussian Process Regression: From Wikipedia Similar, non-linear regression techniques do appear to improve Granger Causality. This is probably due to most linear correlations already being priced into the market and the non-linear correlations will be where the potential profits are. It remains to be seen how effective this can be, as most research in this area is kept private (increasing profits of trading firms). What we can say is that non-linear methods do improve predictions on ProjectPiglet.com. They also require a larger dataset than their linear regression counterparts.
Overall, Granger Causality has quite a few potential pitfalls. It is useful for indicating a potential correlation, but is only a probable correlation. It can help to identify market inefficiencies and open the opportunity to make money, but will probably require more finesse than simple linear regression. All that being said, hope you’ve found some of the insights useful!
For many Gold is the soundest money known to man. It is the high stock to flow ratio of gold which ensures that gold holds it’s value over time. When a gold standard has been applied by a country or nation, peace and prosperity follow. Gold or gold backed money aligns human action, innovation, and labour with time. Allowing humans to store their productive output & mitigates malinvestment. A Gold Standard monetary policy whilst historically supreme, has suffered in it’s practices, as it’s implementation requires trust in a central planning entity to not debase the money. Money is, in its essence a technology to optimize human coordination. The design flaw in our current money system is trust. We cannot have trust as a foundational design element in the system when self interest is an innate part of the human experience. We must, without force, or violence move towards a monetary system that upholds the highest degree of trust minimization. In 1999, American economist and Nobel Prize winner in Economic Sciences Milton Friedman said, when discussing the implications of the internet: “The one thing that’s missing, but that will soon be developed, is a reliable e-cash, a method whereby on the Internet you can transfer funds from A to B, without A knowing B or B knowing A.” On January 9, 2009 a form of electronic cash called Bitcoin was released onto the internet. Bitcoin is a digital decentrazlied currency. There is no central planning entity behind Bitcoin or it’s issuance. Bitcoin transactions are verified by a network of nodes and recorded to a public ledger called a Blockchain. Bitcoin is sound money as an internet protocol. As more and more global citizens connect to the internet in the era of Bitcoin, it is plausible that unprecedented amounts of human capital & innovation shall flourish through cryptographic monetary sovereignty. Thanks for reading! Please feel free to comment or leave feedback
For many Gold is the soundest money known to man. It is the high stock to flow ratio of gold which ensures that gold holds it’s value over time. When a gold standard has been applied by a country or nation, peace and prosperity follow. Gold or gold backed money aligns human action, innovation, and labour with time. Allowing humans to store their productive output & mitigates malinvestment. A Gold Standard monetary policy whilst historically supreme, has suffered in it’s practices, as it’s implementation requires trust in a central planning entity to not debase the money. Money is, in its essence a technology to optimize human coordination. The design flaw in our current money system is trust. We cannot have trust as a foundational design element in the system when self interest is an innate part of the human experience. We must, without force, or violence move towards a monetary system that upholds the highest degree of trust minimization. In 1999, American economist and Nobel Prize winner in Economic Sciences Milton Friedman said, when discussing the implications of the internet: “The one thing that’s missing, but that will soon be developed, is a reliable e-cash, a method whereby on the Internet you can transfer funds from A to B, without A knowing B or B knowing A.” On January 9, 2009 a form of electronic cash called Bitcoin was released onto the internet. Bitcoin is a digital decentrazlied currency. There is no central planning entity behind Bitcoin or it’s issuance. Bitcoin transactions are verified by a network of nodes and recorded to a public ledger called a Blockchain.
Bitcoin is sound money as an internet protocol. As more and more global citizens connect to the internet in the era of Bitcoin, it is plausible that unprecedented amounts of human capital & innovation shall flourish through cryptographic monetary sovereignty. Thanks for reading! Please feel free to comment or leave feedback
Gregory Maxwell /u/nullc has evidently never heard of terms like "the 1%", "TPTB", "oligarchy", or "plutocracy", revealing a childlike naïveté when he says: "‘Majority sets the rules regardless of what some minority thinks’ is the governing principle behind the fiats of major democracies."
UPDATE: This post was inspired by a similar previous post which also has lots of great points, but the current post has a slightly different focus because: (1) This post assumes ignorance (not dishonesty) on the part of nullc. (2) This post basically gives a list of a bunch of sources on Wikipedia talking about oligarchy and plutocracy, as a starting point for anyone interested in this stuff. Gregory Maxwell nullc has repeatedly shown that he has a very weak grasp of the political and economic realities shaping our world today. He should not be (actually nobody should be) in charge of setting major economic policies and parameters (eg money velocity aka "max blocksize") for the most important non-state-based currency in the history of humanity (Bitcoin). Are serious investors and businesspeople going to believe in a new currency whose economic parameters (eg money velocity aka "max blocksize") are centrally planned by a private for-profit corporation Blockstream whose CTO and CEO (Gregory Maxwell nullc and Adam Back adam3us) have repeatedly shown that they are totally clueless when it comes to markets and economics? I don't even know where to begin to school this guy on the reality of politics and economics in the world today. It would take literally years of reading up on events in the mainstream media and online in order for him to get familiar enough with this stuff to stop blurting out ridiculously ignorant statements like:
"Majority sets the rules regardless of what some minority thinks" is the governing principle behind the fiats of major democracies.
Some contemporary authors have characterized current conditions in the United States as oligarchic in nature. Simon Johnson wrote that "the reemergence of an American financial oligarchy is quite recent," a structure which he delineated as being the "most advanced" in the world. Jeffrey A. Winters wrote that "oligarchy and democracy operate within a single system, and American politics is a daily display of their interplay." Bernie Sanders,opined in a 2010 The Nation article that an "upper-crust of extremely wealthy families are hell-bent on destroying the democratic vision of a strong middle-class … In its place they are determined to create an oligarchy in which a small number of families control the economic and political life of our country." The top 1% in 2007 had a larger share of total income than at any time since 1928. In 2011, according to PolitiFact and others, the top 400 wealthiest Americans "have more wealth than half of all Americans combined." French economist Thomas Piketty states in his 2013 book, Capital in the Twenty-First Century, that "the risk of a drift towards oligarchy is real and gives little reason for optimism about where the United States is headed." A study conducted by political scientists Martin Gilens of Princeton University, and Benjamin Page of Northwestern University, was released in April 2014, which stated that their "analyses suggest that majorities of the American public actually have little influence over the policies our government adopts." It also suggested that "Americans do enjoy many features central to democratic governance, such as regular elections, freedom of speech and association, and a widespread (if still contested) franchise." Gilens and Page do not characterize the US as an "oligarchy" per se; however, they do apply the concept of "civil oligarchy" as used by Jeffrey Winters with respect to the US. Winters has posited a comparative theory of "oligarchy" in which the wealthiest citizens – even in a "civil oligarchy" like the United States – dominate policy concerning crucial issues of wealth- and income-protection. Gilens says that average citizens only get what they want if economic elites or interest groups also want it; that is, economic elites and interest groups are influential. ... In a 2015 interview, former President Jimmy Carter stated that the United States is now "an oligarchy with unlimited political bribery," due to the Citizens United ruling, which effectively removed limits on donations to political candidates.
It used to be that citizens in large numbers, mobilized by labor unions or political parties or a single uniting cause, determined the course of American politics. After World War II, a swelling middle class was the most powerful voting bloc, while, in those same decades, the working and middle classes enjoyed comparatively greater economic prosperity than their wealthy counterparts. Kiss all that goodbye. We're now a country run by rich people.
Winters conceives of oligarchy not as rule by the few, but as a kind of minority power created by great concentrations of material wealth. Compatible with a wide range of regimes, oligarchy can co-exist and even be “fused” with democracy as it is today in the United States.
The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.
While the middle class disappears and more Americans fall into poverty, the wealthiest people in our country are using their wealth and political power to protect their privileged status at everyone else's expense.
"Right now, this afternoon, just 400 Americans -- 400 -- have more wealth than half of all Americans combined," Moore avowed to tens of thousands of protesters. "Let me say that again. And please, someone in the mainstream media, just repeat this fact once; we’re not greedy, we’ll be happy to hear it just once. "Four hundred obscenely wealthy individuals ... -- most of whom benefited in some way from the multi-trillion-dollar taxpayer bailout of 2008 -- now have more cash, stock and property than the assets of 155 million Americans combined."
America is not broke. Contrary to what those in power would like you to believe so that you'll give up your pension, cut your wages, and settle for the life your great-grandparents had, America is not broke. Not by a long shot. The country is awash in wealth and cash. It's just that it's not in your hands. It has been transferred, in the greatest heist in history, from the workers and consumers to the banks and the portfolios of the uber-rich. Today just 400 Americans have more wealth than half of all Americans combined. Let me say that again. 400 obscenely rich people, most of whom benefited in some way from the multi-trillion dollar taxpayer "bailout" of 2008, now have more loot, stock and property than the assets of 155 million Americans combined. If you can't bring yourself to call that a financial coup d'état, then you are simply not being honest about what you know in your heart to be true.
Capital in the Twenty-First Century is a 2013 book by French economist Thomas Piketty. It focuses on wealth and income inequality in Europe and the United States since the 18th century. It was initially published in French (as Le Capital au XXIe siècle) in August 2013; an English translation by Arthur Goldhammer followed in April 2014. The book's central thesis is that when the rate of return on capital (r) is greater than the rate of economic growth (g) over the long term, the result is concentration of wealth, and this unequal distribution of wealth causes social and economic instability.
Each of four theoretical traditions in the study of American politics—which can be characterized as theories of Majoritarian Electoral Democracy, Economic-Elite Domination, and two types of interest-group pluralism, Majoritarian Pluralism and Biased Pluralism—offers different predictions about which sets of actors have how much influence over public policy: average citizens; economic elites; and organized interest groups, mass-based or business-oriented. Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic-Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism.
Former President Jimmy Carter had some harsh words to say about the current state of America's electoral process, calling the country "an oligarchy with unlimited political bribery" resulting in "nominations for president or to elect the president." When asked this week by The Thom Hartmann Program (via The Intercept) about the Supreme Court's April 2014 decision to eliminate limits on campaign donations, Carter said the ruling "violates the essence of what made America a great country in its political system."
When the Nobel-Prize winning economist Joseph Stiglitz wrote the 2011 Vanity Fair magazine article entitled "Of the 1%, by the 1%, for the 1%", the title and content supported Stiglitz's claim that the United States is increasingly ruled by the wealthiest 1%. Some researchers have said the US may be drifting towards a form of oligarchy, as individual citizens have less impact than economic elites and organized interest groups upon public policy. A study conducted by political scientists Martin Gilens (Princeton University) and Benjamin Page (Northwestern University), which was released in April 2014, stated that their "analyses suggest that majorities of the American public actually have little influence over the policies our government adopts."
Links for the above references (footnotes) in the Wikipedia article on "Plutocracy":  Stiglitz Joseph E. "Of the 1%, by the 1%, for the 1%" Vanity Fair, May 2011; see also the Democracy Now! interview with Joseph Stiglitz: Assault on Social Spending, Pro-Rich Tax Cuts Turning U.S. into Nation "Of the 1 Percent, by the 1 Percent, for the 1 Percent", Democracy Now! Archive, Thursday, April 7, 2011 http://www.vanityfair.com/news/2011/05/top-one-percent-201105
It’s no use pretending that what has obviously happened has not in fact happened. The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent.
America’s inequality distorts our society in every conceivable way. There is, for one thing, a well-documented lifestyle effect—people outside the top 1 percent increasingly live beyond their means. Trickle-down economics may be a chimera, but trickle-down behaviorism is very real. Inequality massively distorts our foreign policy. The top 1 percent rarely serve in the military—the reality is that the “all-volunteer” army does not pay enough to attract their sons and daughters, and patriotism goes only so far. Plus, the wealthiest class feels no pinch from higher taxes when the nation goes to war: borrowed money will pay for all that. Foreign policy, by definition, is about the balancing of national interests and national resources. With the top 1 percent in charge, and paying no price, the notion of balance and restraint goes out the window. There is no limit to the adventures we can undertake; corporations and contractors stand only to gain. The rules of economic globalization are likewise designed to benefit the rich: they encourage competition among countries for business, which drives down taxes on corporations, weakens health and environmental protections, and undermines what used to be viewed as the “core” labor rights, which include the right to collective bargaining. Imagine what the world might look like if the rules were designed instead to encourage competition among countries for workers. Governments would compete in providing economic security, low taxes on ordinary wage earners, good education, and a clean environment—things workers care about. But the top 1 percent don’t need to care.
 Piketty, Thomas (2014). Capital in the Twenty-First Century. Belknap Press. ISBN 067443000X p. 514: "the risk of a drift towards oligarchy is real and gives little reason for optimism about where the United States is headed." https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century  Gilens & Page (2014) Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens, Perspectives on Politics, Princeton University. Retrieved 18 April 2014. PDF! www.princeton.edu/~mgilens/Gilens%20homepage%20materials/Gilens%20and%20Page/Gilens%20and%20Page%202014-Testing%20Theories%203-7-14.pdf Finally, it is worth mentioning the notorious "Plutonomy" memo prepared by analysts at Citigroup: https://pissedoffwoman.wordpress.com/2012/04/12/the-plutonomy-reports-download/ Citigroup wrote memos in 2005 and 2006 addressed to investors, basically saying that the world is dividing up more and more into a small group of rich people who drive the economy, surrounded by a large number of poor people whose economic interests can be safely ignored. As the above links show, it is shockingly naïve for Gregory Maxwell u/nullc to claim that policies for fiat currencies are determined by "democracies". If he is this ignorant about the reality of so-called democracies and fiat currencies, one can only wonder how much other stuff he is ignorant about, in his ongoing misguided attempts to impose his own centralized economic planning on Bitcoin.
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Friday, 25th May 2018
→DOJ’s Bitcoin Price Manipulation Probe a ‘Good Thing’: Mike Novogratz Billionaire investor Mike Novogratz is optimistic that the US DOJ's recently-launched probe into allegations of bitcoin price manipulation will contribute to the LT health of the crypto market. → Revolut App Adds XRP, Bitcoin Cash to Crypto Options - CoinDeskMobile banking app Revolut now lets users buy, sell and hold Ripple's XRP and bitcoin cash, in addition to bitcoin, litecoin and ether. → Singapore Warns 8 Exchanges Over Unregistered Securities Trading - CoinDeskSingapore's central bank has warned eight digital token exchanges and an ICO issuer to stop trading tokens deemed unauthorized securities. → Ontology And NEO Announce New Huge Partnership Yesterday afternoon, we saw reports of a huge partnership between Ontology and NEO hit the headlines. Daily Performance https://preview.redd.it/u52izib4f0011.png?width=1024&format=png&auto=webp&s=90e65d617691193aef057ac2e1b13ae9531a79c7 Market 25-05-2018 Over the past several days the market has softened up significantly, losing about USD50 billion from the beginning of the week, stabilising today at USD340 billion. However, the down move has been an orderly one, and there has been no clear catalyst for the sell-off, other than the typical uncertainties and noise surrounding regulation. There has been no noticeable pick up in volumes, which remain light at around USD20 billion. Option volatility have not budged from the high 70%s despite the sharp down move, and high correlation across cryptos still indicates that the entire market is moving up and down in tandem with BTC. There simply seems to be a clear lack of conviction in terms of market direction. The above parameters continues to show a consolidative range trade for the near term. -----------------------------------------------------------------------------------------
→ No Investors Affected, Hard to Charge Cryptocurrency Exchange UPbit Experts in the cryptocurrencies of South Korea have stated that it will be difficult for the government and local financial authorities to file charges against UPbit, given that no investors were affected. → Bank of England Issues Working Paper on Central Bank Digital CurrenciesThe Bank of England released a staff working paper, laying out various scenarios of possible risks and financial stability issues of central bank digital currencies (CBDCs). Daily Performance Market 22-05-2018 The cryptocurrencies' market continued to consolidate at current levels, with today seeing a small pull back across the board. Volumes continue to be on the low side with only 16B USD changing hands over the last 24 hours. ETH/BTC spread seems to stabilise at around the 0.083 level for the past week, which shows there are no strong forces in play. High correlation across large cap names all moving up in tandem also indicate a lack of news and conviction in terms of market direction.Also, realised volatility on BTC has dropped further, with implied vols softening up further (ATM< 80%). Both correlation and volatility indicate that for the short term, the overall market is subdued but is likely to drift towards the path of last resistance, which is higher. Having said that, quiet low volume environments are vulnerable to sudden external shocks - be wary of sudden large gaps in market movement! TECHNICAL ANALYSIS BTC
After last year’s massive rally, Bitcoin is currently consolidating the gains inside a large range of $6,505-$10,044.
Krugman and Bitcoin and Me: Radical Thoughts on Fixed Supply Currency
My dad asked me how I reconciled Bitcoin's fixed supply with the Keynesian model of supply. I understand that most people around here don't hold much stock in what Paul Krugman has to say. But much of the real world actually does, what with his Nobel prize and all. So I put some serious consideration into what he had to say about deflation, how it relates to Bitcoin, and other vague currency questions. What follows is my email back to my pa. Many of these ideas have come from my time spent in this forum, so feel free to chop it up, edit, and distribute away if you find any of it worthwhile. Thoughts from a liberal after reading Paul Krugman's 2010 NYT piece: Why is Deflation Bad? Krugman and Bitcoin and Me Krugman's argument against deflation is built with a dependency: that there is a central authority which controls the money supply. So in a sense he has two core points. (1) Krugman prefers that a centralized authority control the currency supply in order to manipulate the economy. I'll allow that this tool can be a good, stabilizing force. But if that's the case, I want to be able to vet that institution from the bottom up before handing them the keys to the kingdom. And I want that institution to unequivocally work for society, not for Goldman Sachs. If I thought the current system worked well, I wouldn't be exploring other options in the first place. (2) Krugman prefers that that centralized authority manipulate the economy such that it encourages spending and lending. In other words, manipulate toward small inflation. This could be a good thing. And maybe the economy it creates is more fluid than a deflationary one. But when you bake into the system incentives to spend now and borrow from the future now, you get exactly the problems that you'd expect: over-consumption and a society largely ridden in debt. Control of the supply of the currency carries tremendous power. It can be used to smooth natural economic cycles and encourage specific consumer and producer behavior. This supply-manipulative ability is not in and of itself a bad thing. The question is whether it is necessary- because with Bitcoin (as it stands) it is impossible. Within the theoretical bounds of crypto-currency, the abilities for algorithmic, "smart" money-supply, one that rests on mathematics rather than the banking elite, are endless. There are truly exciting developments to come in this space. A First Consideration on Currency Think, for a moment, of the unit of currency as sort of a creditor's note. It is an IOU from society; a placeholder for some unit of production. It says, "I produced something valuable (for someone else who takes part in this system). In return I got this note. I have reasonable assurance that one day I can cash this IOU in for something that I'll need in the future." The unit of currency acts as a placeholder for its owner. Under this system, people trade their current productivity for the placeholder, and later (given the system still has integrity) they can trade that placeholder for something that raises their standard of living. It allows us to "time-shift" our production with respect to our consumption. But don't forget!: A unit of currency as "just a thing". It only carries value if it is actually valued by somebody else you want to do business with. The dollar, the gold bar, the Bitcoin. the Euro, all work the same way: they are nothing but numbers or paper or metal. They are just atoms arranged in a way that make them valuable to a group of people only because they trust in the future of their common system. Currencies are a subset of commodities. Commodities are things (oil, clothing, food, televisions) that are valuable to humans because they have useful properties. Like we said above, a currency's use is to "time-shift" production and consumption. The properties of the object that afford this advantage are usually a combination of irreproducibility, fungibility, scarcity, ease of transport, and securability. Why is Deflation Bad? In his 2010 NYT piece, Krugman argues that deflation hurts the economy due to three factors: (1) People become less willing to spend, because sitting on money becomes an investment. Your dollar tomorrow will buy you more than what it can today, so why spend today? Therefore, spending goes down. (2) Those in debt get into serious trouble awfully quickly, because the nominal amount-owed appreciates in value. As a result, they spend significantly less. At the same time, creditors have been shown to not spend enough such that it make up for this difference. Therefore, borrowing (and spending) goes down. (3) Psychologically, people hate nominal wage decreases. With a fixed supply currency, year over year, wages will have to decrease in name. Even if the value of your wage rises, the amount written on the paycheck is lower. Therefore, people freak out. These are troubling scenarios, though I think the first two are more substantial than the third. I don't mean to underestimate the psychological factor- in economics psychology is everything- but we'll talk about this later. Krugman presents the first two points as bugs in a deflationary system. I see them as features. "Your dollar will buy you more tomorrow than what it can today." I think this is natural. We are a rapidly advancing species; through technology we are becoming more efficient, automating crappy tasks, raising the standard of living for less work, of course a dollar (that placeholder for your unit of production) is going to go further tomorrow than it does today. Personally, I find this appealing. It provides every incentive to work now and spend later. That falls very much in line with good ol' American hard-working values and non-consumptive ethics. Krugman finds this worrying though. If people have less incentive to spend, their is a crisis in demand. Hello liberals?! When was the last time we complained about lower consumption? In a country wracked with hyper-consumption that has put an unprecedented load on Earth's environment and ignited a climate crisis, I see a drop in demand as a breath of fresh air! Furthermore, you don't have to worry about people never spending. People will always spend now- but only on the want/need products, rather than the maybe-want-need-this-now-really-might-as-well-because-my-currency-is-losing-value-and-all-these-things-meet-my-zillion-useless-ephemeral-wants products. I do believe there are much higher economic principles at work here. The United States is the world's default consumer. The global economy needs us to consume as much as it needs the million child laborers to produce. The economy would come crashing down if we stopped consuming immediately. But if we're trying to aim for a more sustainable economy, one that is compatible with the Earth's environment, let's move slowly and use a deflating currency as an incentive! "Deflation rewards creditors and hurts debtors. Debtors spend less and creditors don't spend more enough to offset." The impassive Krugman is beating around the bush. There is a problem when debtors suffer at the expense of creditors, and it's more than just a net loss in consumer spending. If you're concerned about a reduction in spending, see my previous point. But the remaining ethical problem is glaring- a power imbalance already exists in a creditor-debtor relationship, and it seems that deflation only widens this gap, crucifying the debt class on a cross of deflationary coin. There's no doubt that this is a problem. And wealth redistribution may ultimately be easier with an inflationary currency- again, a word on that later. But there is also an incentive here: borrow less. Credit card debt is at an all-time high, up 1200% in the US since 1980, all while student loans have ballooned out of control. But neither of these problems even compares to the $7.8 trillion of mortgage debt our country has dug itself into. Now debt is not a bad thing. The right combination of debt and saving, that is- using both capital previously earned with capital borrowed from future earnings- indicates a healthy economy. I don't want to have to work my entire life only to afford a house at the very end. I want to be able to borrow from my future economic output, buy the house now, and live in it while I work to pay it off. The same goes for student debt, corporate debt-financing, etc. Access to credit is crucial to a healthy middle class. But ever-increasing debt is not sustainable. Nobody lives- and produces- forever, so you cannot always borrow from your future economic output. In the end, regardless of the money tricks you play, you have to produce enough value to cover your consumption. The world recently found out, in a mild manor, what happens when a currency's incentive and a nation's culture favors borrowing. When given the opportunity to build houses they never could have dreamed of paying off in their lifetime, millions of people took the offer and the biggest lenders took the risk. The echoes of their mass default still burden the global economy 6+ years later. The point is, if Krugman says "inflation promotes borrowing", I say, "is this debt-ridden wreck what we really want our economy to look like?" "People would freak out when their paycheck goes down." I say get over it. Other possible proclamations in a deflationary world:
"Today, this meal costs the most it ever will!"
"My phone bill will never be this high again!"
"Filling my car up costs less every day!"
"Taxes go down every year so I love my life!"
Better yet, this reflects reality! Technology makes everything cheaper every day. You should be paying lower phone bills tomorrow. Has the infrastructure gotten less efficient? Here it feels like Krugman's grasping for straws. He pounces on people's reaction to their one source of income rather than their many expenses. This point also invokes that ugly liberal side: "The people don't know what's best for them." The Central Authority as a Tool for Wealth Redistribution Now we're talking. As a Liberal, I consider this to be a most important necessary evil. But let's call it what it is: stealing from the rich to give to the poor. (Unless we reject the modern notion of property- stay tuned...) In an inflationary economy, value is constantly leaching out of everyone's savings. Those who control the monetary supply have a means of reaching into every dollar, and skimming off a little bit of value. We can choose to do a lot of good with this. Right now the skimmed dollars are "lent" to banks- the theory is that they then have more to lend to the general public and everyone benefits. Lending is good right? It introduces liquidity. But continue this cycle ad infinitum and all the spending in the economy starts in the form of bank debt! It is no coincidence that Americans households are more in debt than ever before. If wealth redistribution is the only benefit of a central supply authority (which can fall out of trust at any time), this is a weak foundation. We already have a mechanism for wealth redistribution: taxation. Let's be proud of it, call a duck a duck, raise taxes on the wealthy, and introduce that liquidity with massive infrastructural programs, education spending, science spending, etc, rather than in the form of bank loans. One last point- inflation appears to be a flat tax. That's already bad. It affects every dollar proportionally, rich or poor. Worse, the middle class and poor have a higher percentage of their net worth in USD- so inflation then becomes a regressive tax... given to banks... to be lent out to again to the middle class. All in the name of wealth redistribution?! In the name of kick-starting the economy?! Something's fishy here, and "you wouldn't understand, it's more complicated" doesn't cut it as an answer for these practices. Bitcoin So. What are we even doing here? In 2009 a great mind developed a tool, the first in the history of human civilization, for "minting" a currency according to a fixed and open sourced algorithm. Without the involvement of any third party, you can now send an irreproducible digital object of fixed supply to anyone with an internet connection. The implications are mind-boggling. But the first such currency, Bitcoin, happened to be fixed-supply and ultimately deflationary, which has re-sparked the deflation vs. inflation debate. This is happenstance. The protocol that gives rise to these digital currencies- the bitcoin protocol (small b)- could easily implement a different supply model. Paul Krugman can start a currency, KrugCoin, with any supply model that he likes! Which begs one last question. Let's say I'm presented with an option: I may collect my paycheck in a currency that deflates- that is, my paycheck will gain value over time. Or I may collect my paycheck in a currency that inflates- it loses value over time. Why would anyone choose the latter? Must a population be forced into using an inflationary currency? Are we?
The Next Breakthrough Will Be Led by Decentralized Storage Networks
Mr. Zhuo'er Jiang, Founder & C.E.O of BTC.TOP. A true supporter of Bitcoin Cash. At one forum, Mr. Jiang talked about the three breakthroughs in blockchain area. Let's see how the leader of crypto currency view the future of blockchain. The first breakthrough of blockchain: crypto currencies. In 1974, the Nobel Economics Prize Winner Friedrich August von Hayek wrote a book "Denationalization of Money" in which he claimed that it is wrong for governments to monopolize currencies. Monopoly lowers the efficiency of society. It enables the governments to take seigniorage from the people through inflation. Hayek believed that currencies should be denationalized and issued by private organizations. With competitions among these organizations, the value of the currencies would be stabilized. The second breakthrough of blockchain: ICO Most governments have banned unmonitored stocks. ICO ignored this regulation which led to the large scale of projects that are worth tens of billions. It is not uncommon that with a new type of "freedom" comes con men. With the blooming of internet and e-commerce, there came people who took advantage of that and conned many others. With ICO, there are also con men who tricked people of their investment. However, we can't shut down the great inventions/projects just because of this. It takes a while for the society to reach a new balance. After the first two breakthroughs of blockchain, what will be the next? It is a very interesting and important question. If we make the right assessment, we might be able to catch the next big opportunity. The third breakthrough of blockchain: decentralized storage network. It could be a decentralized, tamper-proof file storage system that is based on blockchain. For the past 20 years or so, people relied on the internet for a lot of things. To work together, play together, communicate with their loved ones and so on. There's been an exponential growth of the data generated over the internet. The means to store and safeguard all the data becomes crucial. The way the internet has evolved, single points of failure are everywhere. It is important to improve the properties of internet with the idea of decentralization.
1760 points: itsreaditpeople's comment in Freakonomics: You're twice as likely to go from low to high income in Canada than in the USA
1678 points: mwatwe01's comment in Trade school, not 4-year college, is a better bet to solve the US income gap, researchers say
1445 points: matty_a's comment in Trump Administration Rolls Back Protections for People in Default on Student Loans
1411 points: electrik_wizard's comment in The U.S. Has Forgotten How to Do Infrastructure: The nation once built things fast and cheaply. Now experts are puzzled why costs are higher and projects take longer than in other countries.
"Now that the text of the Trans-Pacific Partnership has finally been released, it is even worse than I thought." Sanders declares, hours after the release of a 1,000 odd page legal document. by u/Tiako (144 pts, 266 comments)
136 pts: u/besttrousers's comment in "But companies still hire people because they have no choice but to. They need enough workers to meet the demands of the market and so they hire people. So if a layoff was to occur I'd occurred regardless of wage hike."
118 pts: u/Timster757's comment in "Now that the text of the Trans-Pacific Partnership has finally been released, it is even worse than I thought." Sanders declares, hours after the release of a 1,000 odd page legal document.
115 pts: u/-Rory-'s comment in Economics is an art, therefore rent controls are a good idea
The phase in which everyone quietly grows desperate
Closely following the economic collapse of my country and continent, I can tell where we are going now. We have arrived at that hilarious point in time where people try desperately to sell their crap to a public that simply can't afford any of it. They have to of course, because they have no viable alternative. The one exception I would have to note is found in the banking sector. Big banks are downsizing their mortgage division, as the risk is too large to them. They won't say that, they declare instead that they can't profit enough, but that's a lie. They earn 4% a year for a period of 10 years, while borrowing themselves for 0.005%. It's not hard to earn money if given such a privilege. So why then are they not interested in lending to the public? The answer is because they recognize what lies ahead for Eurozone economies. The answer is, contrary to what most of the public fears, deflation. Governments seek to prevent deflation, but they're powerless to do so. Christopher Sims, a Nobel prize winning monetary expert, warned that Europe faces deflation, with governments having no real option to prevent it. The real worry should be deflation now. The worst performing countries in Europe, Greece, Portugal and Spain, all face deflation, rather than inflation.2 Most people who have figured out that governments are now lying to us in an effort to get the economy to recover get their economic perspective from libertarians. Libertarians don't warn about deflation however, because Austrian economists tend to deny that deflation is a bad thing. Governments are probably thankful to libertarians for this, as the expectation by the public of deflation in the future is an essential factor for it to happen. We'll find out soon enough that deflation grinds the whole economy to a halt however. Banks in anticipation of deflation refuse to lend out money, because they recognize that people will be unable to pay back the mortgage, while the property they bought won't be worth enough as collateral. The issue for banks is that deflation is associated with high unemployment, as companies have to fire people when people refuse to buy their products, which people will when they can get it for a lower price in the near future. The prices of most goods are going to go down in Europe, as more is produced than consumers can afford. Car sales in my country are down 21.5% in 2014, compared to 2009.3 I am part of an entire demographic of youth who simply gave up on car ownership altogether, as car sales to people aged 18-25 are down 44.7% in my country, in just five years. This triggers blatantly obvious attempts by car manufacturers to market cars to hipsters, young middle class white women.4 They're fearful, because if they don't capture this market today, they'll probably never buy one. It should have been obvious to people in my nation that something was wrong when our prime minister showed up on TV and declared that everyone should buy bigger houses and new cars to save a dying economy.5 The desperation visible here doesn't align with the narrative they are pushing, of an economy that is in recovery. Nor does the recommendation to the elderly of our state secretary to supplement their pension by growing their own food indicate confidence in an ongoing recovery.6 Babyboomers responded with outrage of course, because they don't like hearing the truth. They'd rather have their government lie to them and pretend that housing prices can rise forever, young people will one day buy your overvalued homes and stocks from you and pensions will still be there by the time you're old. They argued that most people who grow their own food actually spend a lot of money, apparently not realizing that rising food prices and declining incomes means that it will be easier to break even in the future. Our governments also take desperate measures to reduce the size of the welfare state. This is a pointless endeavor however, as people have no genuine alternative. It started by declaring that people who don't learn Dutch face cuts to their benefits. The next step we see now is where people who sell puppies on the internet after their dog gave birth suddenly have their benefits withdrawn and are forced to pay back the money they received.7 The government is scared of an underground informal economy rising up that threatens the established economy on which its tax revenue depends. This is inevitable however, as the government creates the incentive itself, as it raises VAT taxes in an effort to fix its budget. Modern technology also makes the formation of a growing informal economy inevitable. Bitcoin allows people to receive payments without any involvement of the banks. We're then able to anonymously exchange the Bitcoin for fiat currency. Times are changing, the trend today in Europe is towards rapid deindustrialization. People who make the mistake of investing in the future by buying a house, buying stock or going to college are setting themselves up for trouble, as they will be faced with assets that lose value and debts they will not be able to pay back. If you wish to see the trend towards deindustrialization for yourself, you should go outside and look at the people gathering blackberries. I'm not the exception to the rule, rather, I'm an early adapter in a trend that is going to spread, as I was with Bitcoin. I think a lot about what we have to do, now that we are faced with the prospect of rapid deindustrialization. Should we try to escalate it? If we want to try to hasten the process of deindustrialization, how do we accomplish this? These are difficult questions to which no clear answer exists. I consider sabotage to be an ethically justified method of prohastening deindustrialization. The problem lies in figuring out what method of sabotage is most efficient. Sabotage that appears efficient may in reality have the opposite expected effect. After World War II developed economies grew very rapidly, as the task of reconstructing our nations created additional economic opportunities. The task of building new houses ensures that people in the construction sector have a long-term job guarantee. This makes banks willing to lend money to the workers, and so forth. Thus counterintuitively, we find that destroying a factory doesn't destroy the factory. We might think that Africa proves the opposite of this rule. Continual civil wars and strife surely seems responsible for the fact that Africa fails to industrialize. I believe this is not true however. What happened in Africa was that Africa did not industrialize because the people did not need the factory. People who can be self-sufficient and produce their own food can not be convinced to start working for minimum wage in a factory, nor can they be convinced to consume its products or to build the infrastructure the factory needs. We know that in Britain, the industrial revolution only happened when the rich successfully drove the poor into the cities, by stealing the commons, public land that was communally utilized. The term "tragedy of the commons" is in fact an insult to our ancestors, a white-washing by an elite. The commons were well managed and utilized, the only tragedy we find is that the commons were stolen from the people, who were then forced to migrate to the cities. The idea that destroying a factory doesn't destroy the factory may seem to libertarians like an expression of the broken window fallacy. However, I would argue that in our current economic situation, the broken window fallacy is itself a fallacy. The broken window fallacy fallacy (no, that's not an error) argues that the man whose window was broken would have otherwise invested the money into some other product, like a slot machine, which he is now forced to spend on fixing his broken window. This explanation only makes sense in an economic climate where people have a strong incentive to spend money and invest in their future. In our current economic climate, people try to make do with the objects we already have. We don't want to buy any new ones, unless we absolutely have to, nor do we invest in the future. The machine is in danger, not when we destroy it, but rather, when we decide that we no longer need it. I believe that we are entering this phase now. An entire generation of young people is figuring out that they do not need a car. This beast of burden that ravages the countryside and fills the landscpae with a network of asphalted paths is a relic of the past. For modern young people, to buy a car is to be old fashioned and naively optimistic about the future. As ironic as it may seem, if we want to get rid of the car and everything it represents, it may be more effective for us to remove a broken glass bottle from the bicycle lane than to burn down a car. A car maker doesn't lie awake at night from a bomb found in his factory, a car maker lies awake at night from the young people he saw the other day with a bicycle. Imagine for a moment that in a town somewhere in the United States, someone shoots at a bunch of transformers or power cables, causing a large grid failure. Surely this would stop the industrial machine? In reality, we might find that people flee from a town, as they have no air conditioning. People find that those without a car have difficulty leaving, as the trains no longer ride. When order is restored, people purchase cars, expecting to increase their autonomy again in the process. Is there no point at all then, to industrial sabotage? I don't believe we should go this far either, but we have to think very hard about the effectiveness of such actions. We have to ask: Where is the machine most vulnerable? To me it would appear that the machine is most vulnerable, exactly there where we do not believe we need it. This would mean that our prime target should be biotechnology. People don't yet believe themselves to need biotechnology, whereas we do believe we depend on the electrical grid. I also expect that the machine is vulnerable whenever it tries to seize something from the natural world. A mine that is opened in a wild forest is vulnerable to disruption, yet because it does not produce anything yet, people don't directly depend on it. In the case of shale oil in the United States or tar oil in Canada, profit margins may be so tight that a systematic sabotage campaign may render the entire industry unsustainable, which would then have the effect of accelerating the collapse of civilization.
Bitcoin buying behavior is best explained by psychology than economics, says Nobel Prize-winning economist Robert Shiller. Bitcoin inventor Satoshi Nakamoto nominated for Nobel Prize in Economics Nobel Prizes are given for making important — preferably fundamental — breakthroughs in the realm of ideas. Considering the establishment’s hatred of Bitcoin, it is quite remarkable that the inventor of bitcoin has been nominated for the 2016 Nobel Prize in Economics. Professor Angus Deaton wins the 2015 Nobel prize in economics. His comments echo those of Pope Francis who has been repeatedly calling on the world to address inequality and climate change . As covered by CCN, Nobel prize-winning economist Joseph Stiglitz recently stated that bitcoin should be outlawed during a Bloomberg television interview. Just one day after, another Nobel laureate, Robert J. Shiller, shared his view on bitcoin: that it will crash in an event similar to the U.S. stock market crash that preceded the great depression. The Bitcoin wallet is in fact a file that we need to send and receive bitcoins; it may be stated that this “document” “contains” our Bitcoins, though in fact what it comprises are cryptographic keys (personal, unique, unrepeatable and secret keys) which make us owners of our bitcoins and let us authorize payments (move possession of the bitcoins).
Bitcoin Dips to $9800 Ethereum 2.0 All You Need To Know
"Robert Shiller, 2013 Nobel Prize winner in Economics, and an expert in the nature of market excesses, has come down on bitcoin and said that the tremendous jump of the virtual currency was a 100 ... Business Insider senior editor Josh Barro sits down with Paul Krugman, a Nobel Prize-winning economist and distinguished professor of economics at the City University of New York. They start by ... Shiller won the Nobel prize economics in October for his research that has improved the forecasting of asset prices in the long term and helped the emergence of index funds in stock markets. He ... Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube. Bitcoin Stock-to-Flow On Track. Bitcoin - Joseph Stiglitz, a Nobel-Prize winning economist, says cryptocurrencies should be shut down. Bitcoin - Joseph Stiglitz, a Nobel-Prize winning economist ...