Let's be honest with each other here, Bitcoin is more of a home science experiment gone amok than a legitimate form of currency. In fact, Bitcoin far more resembles a classic Ponzi scheme than it does a currency, or a monetary system. It was created by a phantom figure known as Satoshi Nakamoto, whose identity has never been confirmed. The Japanese translation of his name roughly equates to "Central Source Wisdom (or Reason) in Japanese.
The basics of Bitcoin resemble a version of a video game you might play from your PlayStation. To enter you must get a "wallet". To create wealth you must "mine" Bitcoin. The mining process was easier at the beginning of the Bitcoin system - known as the "Genesis Block". However, the Bitcoin program was designed to make mining more and more difficult as more and more people joined the process. It has become so difficult that many groups of Bitcoin 'miners" have joined together in pools to share rewards, rather than strike out on their own and have nothing to show for it after months of work. Hence, the Ponzi scheme nature of Bitcoin. Easy money early, but as the pyramid grows the easy money gets to be less and less. Imagine yourself playing a simple video game that has you set up mines here and there, and transporting the "product" back to your fort. As your product grows you can cash it in for stronger fort walls, better soldiers, etc. You get the idea. Essentially, this rather basic concept is the Bitcoin concept.
Beyond the video gaming and Ponzi nature of Bitcoin, there are numerous, serious fundamental flaws in the concept. Firstly, and most importantly, Bitcoin is a decentralized currency. In other words, it is not regulated by anything other than a computer program - essentially. There is no governmental control. There is no central authority like a central bank. In this sense, Bitcoin is almost an anarchy currency - with the important exception that every single transaction of Bitcoin is recorded. Fundamentally any currency, whether gold, salt or paper currency, has as its primary objective to regulate the consumption of resources by people. Given that currency regulates consumption by citizens, and citizens belong to nations, and nations control territory, and territory produces resources, it has always been the case that nations have there own currency - or in the case of the European Union a supra-national currency. The one constant feature is these nations, and even the EU, have governments responsible to their citizens for policy, including the regulation of resource consumption. What Bitcoin attempts to do is take away the regulation of consumption from the state, including the responsibility for that regulation, and hand it over to a computer program that is not responsible for its decisions to anyone. A truly bizarre state of affairs for the human race - one which you might have seen in a sci-fi movie from time to time.
The most dangerous concept of Bitcoin is that it is not rooted in value, but rather transactions. In the Bitcoin world, transactions create value. Essentially, it has no intrinsic value. By contrast, gold is a commodity that is very limited in quantity, is physical, and is almost indestructible. What Bitcoin does is actually emphasize the basic fundamentals of our current financial state. The world now runs on debt rather than value. In this way it regulates how much each person consumes. For example, if you want to purchase a boat, but do not have the necessary cash to do so, you must have enough debt room to borrow to purchase that boat. More often than not, in todays world, you have very little physical wealth to back that loan. However, allowing you to buy that boat now, as opposed to when you have enough dollars to do so, allows companies to keep selling, growing, and so on. Bitcoin takes that a step further. Instead of having debt that is measured in dollars, which have now lost most of their value due to unsupported borrowing, a new Bitcoin system will not require any physical constraint to consumption.
Bitcoin represents a new generation of irresponsible economics, designed primarily to serve the individual rather than the collective society. Its inevitable result is the stripping of social constraints on consumption. For instance, medicare may be paid by taxes in one country, but another country may require private payment for the same services. In a Bitcoin world the transactions for such services would be between the doctor and the patient, leaving no room for societal values. In this sense, Bitcoin represents an extreme Libertarian view of the world. After all, if you take Bitcoin at face value, and take it to its logical conclusion, a Bitcoin world would be dominated solely by Bitcoin transactions - the world currency. If this isn't the case why does Bitcoin exist? It's the old "half-pregnant" argument. There is either a recognized crypto currency in the world or there isn't. If there is such an instrument, then the world recognizes that this currency based on a computer program is legitimate. If that is legitimate, then the current currency model must no longer be legitimate. There cannot be two simultaneous currencies in the world - one which is controlled by central banks and one which is not.
Our financial system is, at the moment, is unsupported and unsustainable. It is based on nothing other than debt. China, Russia and a few other countries are trying to reign in consumption of resources by tying the value of currencies to something meaningful and measurable - gold. China has basically banned Bitcoin operations in its country, and that is a wise move from one of the wisest societies on earth. Instead, it is implementing discipline by implementing a gold standard to measure its currency by. Russia is moving in the same direction. Personally, I see the Bitcoin movement as an attempt to circumvent the direction China and Russia have been moving in. It's simply a very poorly veiled attempt to convert the American dollar as the world's main reserve currency to Bitcoin. By doing so the Americans hope to halt the reestablishment of the gold standard which, if implemented on a world-wide basis, would render the US dollar almost worthless and see the Chinese currency become the world's leading reserve currency. No doubt the Chinese see this themselves as they banned Bitcoin.
The current price for a single bitcoin is $6,025.06 or about four times the price of an ounce of gold. All the gold mined in the world, since recorded history at least, could fill three Olympic sized swimming pools. So what makes Bitcoin so much more valuable than one of the least available commodities in the world? The answer is nothing. It's sheer speculation by the same folks that normally run up the stock market. In fact, they are attempting to create a market where one isn't needed. The reason: greed. It's like a new gold rush. Except it isn't gold. It isn't anything but a play on a simple video game that rewards those in early, and leaves the last arrivals holding the bag. Do yourself a big favour, see Bitcoin for what it is - a mirage.
Monday, October 9, 2017
Monday, October 2, 2017
Dear Premier Ball
Dear Premier Ball,
I know it's been awhile, and I know I've sworn off writing about Newfoundland and Labrador politics, but some things just can't be left unsaid. I've watched you now for almost two years, and am constantly amazed at how you let the issues that arise beat the bejezuz out of you before you act. Maybe it's the advice your getting (it's bad advice). Maybe it's you being bull headed (I hear you don't like dissent, but who knows). Perhaps it's a sadomasochistic enjoyment of being pummeled before cluing in (I doubt it, but who knows). Bottom line is this Dwight, when you drag your feet on obvious decisions those back biters in your party love it cause it makes you look like a weak leader, and the PCs who caused the problems in the first place love it cause you begin to wear their dirty clothes. Here's how you can turn that all around.
The Muskrat Falls nightmare. Yes, it's a doozy. One of those damned if you do and damned if you don't, cause you wanted political office too badly and now you have to live it, quagmires. The way out is like this: don't put off an obvious political decision until it looks like you're hiding something to cover your own arse. It's called political foresight. If you don't have it, and none of the people around you have it, do yourself a favour and find someone that does. When it comes to the Muskrat Falls inquiry, I've taken it upon myself to give you a free-bee.
First off, it has to be seen as beyond reproach. That's a pretty tough call in Newfoundland - as one very senior judge in Newfoundland once said to me: "If nothing else Mr. Cabana, you have managed to expose ... I'm not sure if this is the right word ... the incestuous relationship between the court and the legal profession here." When every law firm has a finger in the political pie, it is very difficult if not impossible to get a judge to preside over this inquiry that is beyond fairly easy scrutiny. Here's my suggestion: if not a judge from out of province, then try retired Justice Orsborne. He took on Danny Williams over the naming of the court house in Corner Brook so I think you would have a winner there.
Secondly, the terms of reference. It's not much good to have a great judge and then tie his hands with a restrictive terms of reference. Besides, the finger will be immediately pointed at you for trying to sabotage the inquiry before it even starts. To be honest Dwight, having the "departments" craft the terms of reference is a really bad start. The departments have a vested interest in covering their own butts in any inquiry, and you know they were up to their necks in it. Kinda like asking the thief to judge himself. You have to avoid stuff like that. What you need to do here is use your common sense. Muskrat Falls was a "political issue" from day one, and not a "departmental issue". If you want to get at the truth, and you aren't trying to white wash the deal for say a friend, like I don't know, say Brian Tobin, who is a friend of say Danny Williams, then you have an open terms of reference: The legislation that ran up to it; the awarding of contracts; the sale of the former Premier's assets to companies that won the major bids; etc, etc.
While you are at it Dwight, but only if you want to try and calm the waters, you might want to include the government and Nalcor's treatment of dissidents of the project. After all, Liberals are big champions of the Charter, right? Showing that the government is concerned about citizens being silenced and character assassinated by their own government might win you some points amongst the "Known Critics", and hey, they may not be attacking you and your inquiry every five minutes. A degree of bipartisan support never hurts. Being a statesman is never a disqualification for leadership, and hey, you and I both know some Liberals are sharpening their knives in the shadows. So do yourself a monumental favour, and make this an important part of the inquiry. After all, if a province has healthy dissent its leadership is less likely to pull bone head moves, like, say, Muskrat Falls.
Just an aside Dwight. On the whole forensic audit thing. You might as well announce that too. Just like Scrooge's ghosts, not green lighting this is gonna bury the inquiry, you, and the Liberals. You don't want that right?
Oh ya, one last thing. If you fail to take this free-bee advice, your inquiry is going to blow up into the nightmare your mother warned you about. Imagine it now: the social media, and especially us bloggers, are going to crucify you and the party for covering up for your buddies; radio shows will be giving you a throbbing head ache; and even the press will more than likely join the band wagon. They're all looking for blood - yours, Danny's - you get the idea. Do yourself a favour, Dwight, stop listening to whoever it is that's giving you the shitty advice, probably helping you out the door for their buddies, and do the sensible thing. You can't be faulted for the sensible thing. Come what may.
I know it's been awhile, and I know I've sworn off writing about Newfoundland and Labrador politics, but some things just can't be left unsaid. I've watched you now for almost two years, and am constantly amazed at how you let the issues that arise beat the bejezuz out of you before you act. Maybe it's the advice your getting (it's bad advice). Maybe it's you being bull headed (I hear you don't like dissent, but who knows). Perhaps it's a sadomasochistic enjoyment of being pummeled before cluing in (I doubt it, but who knows). Bottom line is this Dwight, when you drag your feet on obvious decisions those back biters in your party love it cause it makes you look like a weak leader, and the PCs who caused the problems in the first place love it cause you begin to wear their dirty clothes. Here's how you can turn that all around.
The Muskrat Falls nightmare. Yes, it's a doozy. One of those damned if you do and damned if you don't, cause you wanted political office too badly and now you have to live it, quagmires. The way out is like this: don't put off an obvious political decision until it looks like you're hiding something to cover your own arse. It's called political foresight. If you don't have it, and none of the people around you have it, do yourself a favour and find someone that does. When it comes to the Muskrat Falls inquiry, I've taken it upon myself to give you a free-bee.
First off, it has to be seen as beyond reproach. That's a pretty tough call in Newfoundland - as one very senior judge in Newfoundland once said to me: "If nothing else Mr. Cabana, you have managed to expose ... I'm not sure if this is the right word ... the incestuous relationship between the court and the legal profession here." When every law firm has a finger in the political pie, it is very difficult if not impossible to get a judge to preside over this inquiry that is beyond fairly easy scrutiny. Here's my suggestion: if not a judge from out of province, then try retired Justice Orsborne. He took on Danny Williams over the naming of the court house in Corner Brook so I think you would have a winner there.
Secondly, the terms of reference. It's not much good to have a great judge and then tie his hands with a restrictive terms of reference. Besides, the finger will be immediately pointed at you for trying to sabotage the inquiry before it even starts. To be honest Dwight, having the "departments" craft the terms of reference is a really bad start. The departments have a vested interest in covering their own butts in any inquiry, and you know they were up to their necks in it. Kinda like asking the thief to judge himself. You have to avoid stuff like that. What you need to do here is use your common sense. Muskrat Falls was a "political issue" from day one, and not a "departmental issue". If you want to get at the truth, and you aren't trying to white wash the deal for say a friend, like I don't know, say Brian Tobin, who is a friend of say Danny Williams, then you have an open terms of reference: The legislation that ran up to it; the awarding of contracts; the sale of the former Premier's assets to companies that won the major bids; etc, etc.
While you are at it Dwight, but only if you want to try and calm the waters, you might want to include the government and Nalcor's treatment of dissidents of the project. After all, Liberals are big champions of the Charter, right? Showing that the government is concerned about citizens being silenced and character assassinated by their own government might win you some points amongst the "Known Critics", and hey, they may not be attacking you and your inquiry every five minutes. A degree of bipartisan support never hurts. Being a statesman is never a disqualification for leadership, and hey, you and I both know some Liberals are sharpening their knives in the shadows. So do yourself a monumental favour, and make this an important part of the inquiry. After all, if a province has healthy dissent its leadership is less likely to pull bone head moves, like, say, Muskrat Falls.
Just an aside Dwight. On the whole forensic audit thing. You might as well announce that too. Just like Scrooge's ghosts, not green lighting this is gonna bury the inquiry, you, and the Liberals. You don't want that right?
Oh ya, one last thing. If you fail to take this free-bee advice, your inquiry is going to blow up into the nightmare your mother warned you about. Imagine it now: the social media, and especially us bloggers, are going to crucify you and the party for covering up for your buddies; radio shows will be giving you a throbbing head ache; and even the press will more than likely join the band wagon. They're all looking for blood - yours, Danny's - you get the idea. Do yourself a favour, Dwight, stop listening to whoever it is that's giving you the shitty advice, probably helping you out the door for their buddies, and do the sensible thing. You can't be faulted for the sensible thing. Come what may.
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