Lifeboat Foundation: Safeguarding Humanity
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Category: economics – Page 229

EXCERPT

To further underpin this statement, I will share Peter Drucker’s quote, “…The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic…” And also that of Dr. Stephen Covey, “…Again, yesterday holds tomorrow hostage .… Memory is past. It is finite. Vision is future. It is infinite. Vision is greater than history…” And that of Sir Francis Bacon, “… He that will not apply new remedies must expect new evils, for time is the greatest innovator …”

And that of London Business School Professor Gary Hamel, PhD., “…You cannot get to a new place with an old map…” And that of Alvin Toffler, “…The future always comes too fast and in the wrong order…”

View the entire presentation at http://lnkd.in/dP2PmCP

Supermanagement! by Mr. Andres Agostini (Excerpt)

DEEPEST

“…What distinguishes our age from every other is not the world-flattening impact of communications, not the economic ascendance of China and India, not the degradation of our climate, and not the resurgence of ancient religious animosities. Rather, it is a frantically accelerating pace of change…”

Read the entire piece at http://lnkd.in/bYP2nDC

By Avi Roy, University of Buckingham and Anders Sandberg, University of Oxford

Men who are unemployed for more than two years show signs of faster ageing in their DNA, according to a study published today in the journal PLOS ONE.

Researchers at the University of Oulu, Finland and Imperial College, London arrived at this conclusion by studying blood samples collected from 5,620 men and women born in Northern Finland in 1966. The researchers measured the lengths of telomeres in their white blood cells, and compared them with the participants’ employment history for the prior three years, and found that extended unemployment (more than 500 days in three years) was associated with shorter telomere length.

Telomeres are repetitive DNA sequences at the ends of chromosomes, which protect the chromosomes from degrading. With every cell division, it appears that these telomeres get shorter. And the result of each shortening is that these cells degrade and age.

When cells are grown in a lab, their telomeres do indeed shorten each time the cells divide. This process can be used to find a cell’s “expiry date”, a prediction of when that cell will run out of telomeres and stop dividing. However, this does not seem to relate to the actual health of the cells.

In the new study, the researchers found that that on average, men who had been unemployed for more than two of the preceding three years were more than twice as likely to have short telomeres compared to men who were continuously employed. In women, there was no association between unemployment status and telomere length.

The researchers accounted for telomere length differences resulting from medical conditions, obesity, socio-economic status and early childhood environment.

Previous studies, noted by the study authors, have found a correlation between shorter telomeres and higher rates of age-related diseases like Type 2 diabetes and heart disease. The authors conclude that the reduction in these men’s telomeres may have been the result from the stress of long-term unemployment, adding to evidence of a direct connection between prolonged unemployment and poor health.

An abstract concept

Employment is something very abstract; an employed and unemployed body are apparently more or less the same. So it might seem surprising that such an abstract thing as employment can affect a body on the cellular level. But the same is true for how stimuli affect our brains: remote objects trigger electrochemical cascades in our visual system – and when we learn new things, gene expression in the brain changes. We are interactive creatures, with innumerable stimuli that are constantly shaping multiple processes in our bodies. In this sense, the hypothesis that employment experience has cellular effects is not surprising.

This was an association study, which means than under certain set of circumstances two variables are statistically linked. This study is therefore incapable of genuinely predicting whether unemployment is the cause, and short telomeres the effect. Perhaps the opposite is true: maybe people whose cells lose their telomeres also lose their jobs. More likely, an outside factor that shortens telomeres could have a limiting effect on success in the labour market. For example, such a factor might somehow contribute towards illness or pessimism.

Additionally, because the study was conducted in an isolated and genetically quite homogeneous population, the results of the study may be due to their genetic make-up as well as (or instead of) environmental effects.

In the end, we do not need a genetic study to know long-term unemployment is bad for people socially, medically and psychologically; there is plenty of evidence for that. Additionally, the bio-gerontology community (those who study the biological processes of ageing) recognises telomere attrition as one of the nine causes of the disease of ageing, including Type 2 diabetes and cardiovascular diseases.

Where this study does make a significant contribution is in recognising long-term, low-level stress as a major problem. In momentarily stressful situations, the instant fight-or-flight response stimulates us; but being under pressure for a long time with no relief wears us down. Prolonged stress is bad for memory and health, and could quite conceivably shorten telomeres – making an unemployed person significantly more unhealthy, with the effects persisting even after they get a job.

In the long run, what we really need to learn to slow or stop the ageing process is how to reduce or repair the damage done by stress.

The authors do not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article. They also have no relevant affiliations.

This article was originally published at The Conversation.
Read the original article.

(Excerpt)

Beyond the managerial challenges (downside risks) presented by the exponential technologies as it is understood in the Technological Singularity and its inherent futuristic forces impacting the present and the future now, there are also some grave global risks that many forms of management have to tackle with immediately.

These grave global risks have nothing to do with advanced science or technology. Many of these hazards stem from nature and some are, as well, man made.

For instance, these grave global risks ─ embodying the Disruptional Singularity ─ are geological, climatological, political, geopolitical, demographic, social, economic, financial, legal and environmental, among others. The Disruptional Singularity’s major risks are gravely threatening us right now, not later.

Read the full document at http://lnkd.in/bYP2nDC

The Future of Scientific Management, Today! (Excerpt)

Transformative and Integrative Risk Management
Andres Agostini was asked this question:

Mr. David Shaw’s question, “…Andres, from your work on the future which management skills need to be developed? Classically the management role is about planning, organizing, leading and controlling. With the changes coming in the future what’s your view on how this management mix needs to change and adapt?…” Question was posited on an Internet Forum, formulated by Mr. David Shaw (Peterborough, United Kingdom) on October 09, 2013.

This is an excerpt from, “…The Future of Scientific Management, Today…” that discusses state-of-the-art management theories and practices. To read the entire piece, just click the link at the end of article.

CONCLUSION

In addition to being aware and adaptable and resilient before the driving forces reshaping the current present and the as-of-now future, THERE ARE SOME EXTRA MANAGEMENT SUGGESTIONS THAT I CONCURRENTLY PRACTICE:

1.- Given the vast amount of insidious risks, futures, challenges, principles, processes, contents, practices, tools, techniques, benefits and opportunities, there needs to be a full-bodied practical and applicable methodology (methodologies are utilized and implemented to solve complex problems and to facilitate the decision-making and anticipatory process).

The manager must always address issues with a Panoramic View and must also exercise the envisioning of both the Whole and the Granularity of Details, along with the embedded (corresponding) interrelationships and dynamics (that is, [i] interrelationships and dynamics of the subtle, [ii] interrelationships and dynamics of the overt and [iii] interrelationships and dynamics of the covert).

Both dynamic complexity and detail complexity, along with fuzzy logic, must be pervasively considered, as well.

To this end, it is wisely argued, “…You can’t understand the knot without understanding the strands, but in the future, the strands need not remain tied up in the same way as they are today…”

For instance, disparate skills, talents, dexterities and expertise won’t suffice ever. A cohesive and congruent, yet proven methodology (see the one above) must be optimally implemented.

Subsequently, the Chinese proverb indicates, “…Don’t look at the waves but the currents underneath…”

2.- One must always be futurewise and technologically fluent. Don’t fight these extreme forces, just use them! One must use counter-intuitiveness (geometrically non-linearly so), insight, hindsight, foresight and far-sight in every day of the present and future (all of this in the most staggeringly exponential mode). To shed some light, I will share two quotes.

The Panchatantra (body of Eastern philosophical knowledge) establishes, “…Knowledge is the true organ of sight, not the eyes.…” And Antonio Machado argues, “… An eye is not an eye because you see it; an eye is an eye because it sees you …”

Managers always need a clear, knowledgeable vision. Did you already connect the dots stemming from the Panchatantra and Machado? Did you already integrate those dots into your big-picture vista?

As side effect, British Prime Minister W. E. Gladstone considered, “…You cannot fight against the future…”

THE METHOD

3.- In all the Manager does, he / she must observe and apply, at all times, a sine qua non maxim, “…everything is related to everything else…”

4.- Always manage as if it were a “project.” Use, at all times, the “…Project Management…” approach.

5.- Always use the systems methodology with the applied omniscience perspective.

In this case, David, I mean to assert: The term “Science” equates to about a 90% of “…Exact Sciences…” and to about 10% of “…Social Sciences…” All science must be instituted with the engineering view.

6.- Always institute beyond-insurance risk management as you boldly integrate it with your futuring skill / expertise.

7.- In my firmest opinion, the following must be complied this way (verbatim): the corporate strategic planning and execution (performing) are a function of a grander application of beyond-insurance risk management.It will never work well the other way around. TAIRM is the optimal mode to do advanced strategic planning and execution (performing).

TAIRM (Transformative and Integrative Risk Management) is not only focused on terminating, mitigating and modulating risks (expenses of treasure and losses of life), but also concentrated on bringing under control fiscally-sound, sustainable organizations and initiatives.

TAIRM underpins sensible business prosperity and sustainable growth and progress.

8.- I also believe that we must pragmatically apply the scientific method in all we manage to the best of our capacities.

If we are “…MANAGERS…” in a Knowledge Economy and Knowledge Era (not a knowledge-driven eon because of superficial and hollow caprices of the follies and simpletons), we must do therefore extensive and intensive learning and un-learning for Life if we want to succeed and be sustainable.

As a consequence, Dr. Noel M. Tichy, PhD. argues, “…Today, intellectual assets trump physical assets in nearly every industry…”

Consequently, Alvin Toffler indicates, “…In the world of the future, THE NEW ILLITERATE WILL BE THE PERSON WHO HAS NOT LEARNED TO LEARN…”

We don’t need to be scientists to learn some basic principles of advanced science.

EFFORT

Accordingly, Dr. Carl Sagan, PhD. expressed, “…We live in a society exquisitely dependent on science and technology, in which hardly anyone knows about science and technology…” And Edward Teller stated, “…The science of today is the technology of tomorrow …”

And it is also crucial this quotation by Winston Churchill, “…If we are to bring the broad masses of the people in every land to the table of abundance, IT CAN ONLY BE BY THE TIRELESS IMPROVEMENT OF ALL OF OUR MEANS OF TECHNICAL PRODUCTION…”

9.- In any management undertaking, and given the universal volatility and rampant and uninterrupted rate of change, one must think and operate in a fluid womb-to-tomb mode.

The manager must think and operate holistically (both systematically and systemically) at all times.

The manager must also be: i) Multidimensional, ii) Interdisciplinary, iii) Multifaceted, iv) Cross-functional, and v) Multitasking.

That is, the manager must now be an expert state-of-the-art generalist and erudite. ERGO, THIS IS THE NEWEST SPECIALIST AND SPECIALIZATION.

Managers must never manage elements, components or subsystems separately or disparately (that is, they mustn’t ever manage in series).

Managers must always manage all of the entire system at the time (that is, managing in parallel or simultaneously the totality of the whole at once).

10.- In any profession, beginning with management, one must always and cleverly upgrade his / her learning and education until the last exhale.

An African proverb argues, “…Tomorrow belongs to the people who prepare for it…” And Winston Churchill established, “…The empires of the future are the empires of the mind…” And an ancient Chinese Proverb: “…It is not our feet that move us along — it is our minds…”

And Malcolm X observed, “…The future belongs to those who prepare for it today…” And Leonard I. Sweet considered, “…The future is not something we enter. The future is something we create…”

And finally, James Thomson argued, “…Great trials seem to be a necessary preparation for great duties …”

The entire document is available at http://lnkd.in/bYP2nDC

Futurewise Success Tenets

“Futurewise Success Tenets” here is an excerpt from, “The Future of Scientific Management, Today”. To read the entire piece, just click the link at the end of article. As follows:

(1) Picture mentally, radiantly. (2) Draw outside the canvas. (3) Color outside the vectors. (4) Sketch sinuously. (5) Far-sight beyond the mind’s intangible exoskeleton. (6) Abduct indiscernible falsifiable convictions. (7) Reverse-engineering a gene and a bacterium or, better yet, the lucrative genome. (8) Guillotine the over-weighted status quo. (9) Learn how to add up ─ in your own brainy mind ─ colors, dimensions, aromas, encryptions, enigmas, phenomena, geometrical and amorphous in-motion shapes, methods, techniques, codes, written lines, symbols, contexts, locus, venues, semantic terms, magnitudes, longitudes, processes, tweets, “…knowledge-laden…” hunches and omniscient bliss, so forth. (10) Project your wisdom’s wealth onto communities of timeless-connected wikis. (11) Cryogenize the infamous illiterate by own choice and reincarnate ASAP (multiverse teleporting out of a warped / wormed passage) Da Vinci, Bacon, Newton, Goethe, Bonaparte, Edison, Franklyn, Churchill, Einstein, and Feynman. (12) Organize relationships into voluntary associations that are mutually beneficial and accountable for contributing productively to the surrounding community. (13) Practice the central rule of good strategy, which is to know and remain true to your core business and invest for leadership and R&D+Innovation. (14) Kaisen, SixSigma, Lean, LeanSigma, “…Reliability Engineer…” (the latter as solely conceived and developed by Procter & Gamble and Los Alamos National Laboratories) it all unthinkably and thoroughly by recombinant, a là Einstein Gedanke-motorized judgment (that is to say: Einsteinian Gedanke [“…thought experiments…”]. (15) Provide a road-map / blueprint for drastically compressing (‘crashing’) the time’s ‘reticules’ it will take you to get on the top of your tenure, nonetheless of your organizational level. (16) With the required knowledge and relationships embedded in organizations, create support for, and carry out transformational initiatives. (17) Offer a tested pathway for addressing the linked challenges of personal transition and organizational transformation that confront leaders in the first few months in a new tenure. (18) Foster momentum by creating virtuous cycles that build credibility and by avoiding getting caught in vicious cycles that harm credibility. (19) Institute coalitions that translate into swifter organizational adjustments to the inevitable streams of change in personnel and environment. (20) Mobilize and align the overriding energy of many others in your organization, knowing that the “…wisdom of crowds…” is upfront and outright rubbish. (21) Step outside the boundaries of the framework’s system when seeking a problem’s solution. (22) Within zillion tiny bets, raise the ante and capture the documented learning through frenzy execution. (23) “…Moonshine…” and “…Skunks-work…” and “…Re-Imagineering…” all, holding in your mind the motion-picture image that, regardless of the relevance of “…inputs…” and “…outputs,…”, entails that the highest relevance is within the sophistication within the THROUGHPUT.….. (69) Figure out exactly which neurons to make synapses with. (70) Wire up synapses the soonest…”

Read the full material at http://lnkd.in/bYP2nDC

Regards,

Mr. Andres Agostini
www.linkedin.com/in/AndresAgostini

originally posted @Ntegrationalism

This past week I was at the Canadian Consulate General in New York for their Celebration of Innovation in Financial Technology, which featured 10 start-ups or early stage companies from the most robust nation in financial terms, according the IMF & World Bank stress tests. I’ve been thinking about fintech and the use of technology to better distribute wealth via identifying the value that individuals possess for some time. The meeting hosted by @miriam_leia CanadaNY’s chief innovation officer compelled me to start piecing some of the writing that I’ve done on the topic of value. I’m unsure how to summarize things enough for a quick read, hopefully this isn’t too choppy.

Great Automation

We find ourselves at the beginning of a somewhat great automation. While formidable arguments exist from every political faction on the potential for job creation and depletion, forecasters can confirm that the growth trends of technology show no signs of slowing; continued automation of tasks in business services for enterprise are on the horizon.

·Demand side: Restore public-sector jobs and invest in infrastructure for immediate jobs and long-term growth.

·Supply side: Extend Bush-era tax cuts to spur economy. Cut spending to curb growth-crushing debt and deficit.

·Another way: Invest in community-based, member-owned cooperatives and reduce the workweek.

Even as the world economy reacts to the automation of the its most affluent and technologically advanced nations, we find ourselves unable to distribute vales well for physical laborers.

At McKiney & Company, David Fine quotes: Africa’s workforce, young and growing quickly, will be the world’s largest by 2035. Unemployment stands at just 9 percent, but two-thirds of the labor force are in vulnerable, non-wage-paying jobs.

I wrote to the IEET a few years ago to provoke some discussion on the ethics of automation from an information technology standpoint, as the ethnography behind automation has been a large focus of mine over the past decade with corporations as a consultant. According to ContactHMRC.com, “Even as resistance was futile the protests continue at each firm I visited. It seems that the exponential growth of technology, not only from a hardware standpoint (via Moore’s Law), but also from a methodological and software standpoint, requires a new method of distributing values.” Jobs are difficult to generate in this great automation. Further, if our labor culture is changing for goods and services, I’m not aligned with the idea that we can restore historical methods. We must innovate out of joblessness.

Our inability to quantify the toiling of the individual and even the institution has hampered our ability to sustain gainful employment (jobs) during the accelerating changes. Note: I am not referring to sustainability, as it is illogical to seek, but to state that we are not agile. In the modern world individuals and institutions are participating more than ever in the process of development of goods/services through passive means. They are influencers. Specifically I mean: we are performing the act of development of goods and services without being compensated for it or even realizing our participation. Consider a long being in empty space, worthless. While human-kind can’t have inherent value, community can. We all generate values at the point we can interact with another.

In business CRM (customer relations management) and UX (user experience) are examples of how we leverage a consumer to be their own discoverer, developer, and deploy-er of solutions to problems. Via a conduit (profit seeking institution) as a platform, we interact. Sure there may be a single or group of experts monitoring the feedback, but the fact that feedback exists warrants some nominal indemnification other than the creation of new products for consumers, no? Figure 1. Represents a crude the CRM input process.

crm input

While the system is still new, culturally, functionally, and technologically – we’ve managed to build and identify better sensors for data points on participants in the crowd. Our ability to evaluate systemic risks and opportunities is actually an older statistical science that mathematicians and economists have been tinkering for decades. The fact that entrepreneurs who develop software solely based on customer reviews in the Salesforce.com AppExchange to then distribute as an added service is justification enough to consider how we indemnify a society for its knowledge and experience as a user. Is it valuable to seek more useful or even intuitive experiences? Companies have dedicated efforts to understanding sentiment on news by consumers and reactors to information regarding their enterprise. Firms like, Finmaven: Tool for publicly traded companies to monitor, publish and analyze social media…or, Market IQ: Analysis of unstructured data such as social media to provide real time insights to traders.. Automation is much broader than marketing and customer relations; however, the processes around relations are at the core of automation.

Too Connected To Fail

Our relations in our close and extended networks are what provide the tangible value that other individuals and institutions derive from us. As social beings we are somewhat obligated to interact well. While this sheds no light on egalitarian ideals, it does provide an opportunity for less-introverted individuals and institutions to be indemnified for participation. For example, at HBS participation often accounts for 50% of the total course grade. That method is good enough to start with, no? Lowering our degrees-of-separation from our peers and attracting new connections is what elects the people at the top of the classes at Harvard Business School. People learn how to communicate more effectively through the rigor of participation, and their value sky rockets relative to the rest of the business community.

In the past decade the global “great recession” exposed our systemic vulnerability and ties to each other at the micro and macro scale. Financial innovations have enabled risk transfers that were not fully recognized by financial regulators or by institutions themselves, complicating the assessment of a “too-connected–to-fail” problem. Companies in FinTech are closing the communication gap like Quantify Labs: CRM and Content Platform for Institutional Finance. In plain English they show all communication between bank’s customers and vendors. Scenarios like, who checked which communications and the supply-chain of communication. Anyone who has ever watched a movie about finance and trading of equities knows that traders and brokers mostly talk to each other to buy and sell stakes in equities for mutual benefit. Expanding communications or even knowledge of existing communications on creates more threads to an ever-expanding web of connectivity. As an evolving species, we need our web to continue to grow in order to support our initiative for growth, or creating technologies on a more grand scale.

The mentioned initiative can be found in every facet of our lives. Form the International Monetary Fund (IMF) Figure 2. A diagrammatic depiction of co-risk feedbacks, presents the conditional co-risk estimated between pairs of selected financial institutions. In plain English, the numbers on the diagram are communication linkages between people/assets at these banks.

imf

While there is some debate on exactly what the framework should be to quantify co-dependence or co-risk, the best solution should be a growing group of qualified rating methods and agencies evaluating data differently as it changes and expands, as it does. Similar to this type of co-dependence our civilization’s most important institutions, our most important individuals are also co-dependent on a group of near and distant peers. We are all dependent on other to discover, develop, and deploy solutions to problems of a more personal kind.

Software services like Klout, Kred, Peer Index, and at least a dozen more are making efforts to mine through the data that we communicate to influence, in order to deliver a score with regards to our varied value (depending on their methodology and focus). Similar to the IMF individuals need to evaluate co-dependence and influence on their peers but also on institutions. Applying Klout-like methods to measure our value will enable us to make formidable legal and political arguments for out just due. And perhaps a more manageable transition through structural unemployment and globalization is possible via what’s due. Note: I am using influence and co-dependence to reference social value on entities. We all play a role in the negotiation that is life’s happenings but those of us who aren’t entrepreneurs rarely know that we’re a part of the conversations affecting decisions.

Connectivity is starting to span beyond social connections and socialization in general. It is starting to be quantified in new ways, as there are no shortages in places to install sensors and things to understand. Physical sensors that help us recognize, colors, odors, heat, distance, sounds, etc are all being created as devices that empower an application programming interface (API), which is another way to allow information technology to quantify how we engage sensors. The appification of sensors like Node or Canary or Leap Motion are the next generation of sensors that we’ve used on watches and cameras. Looking forward to days where nanorobotics can monitor mitochondrial stability to forecast and avoid apoptosis to help cells cheat death, of course, we still have a long way to go. Today, the case can be made to spread some of the abundant wealth by validating the abundant value each individual creates through info tech.

Technoprogressivism

From a political standpoint a new debate needs to be had around how we react to the types of joblessness that results from rapidly changing technology, as the rate of changing is seemingly increasing. In regards to technoprogressivism and structural unemployment via automation and other methods; it is ideal to embrace the end of work: meaning that there should be some equitable distribution of the leisure created by automation.

While ideas on the end of work have been around for centuries, the distribution of leisure within or succeeding a capitalistic system is quite new. The innovation in distribution of social values that needs to occur is separate from welfare. It is understandably just to enforce a pervasive welfare state for our inability to distribute value; however, it is not an adequate remedy to the wealth gap and technologies effort to quantify all things. The root of our problem is our inability to distribute values among those who actually participate in creating it, while managing risk (or insurances). A guaranteed basic income and/or a shorter work week are not elaborate enough to compel an agile system of developments in compensation, even while they are necessary.

Information technology and the manipulation of BigData, are enabling us to understand who is influencing which changes, even at a nominal rate. Incentivizing individuals and institutions to interact in a more transparent way is important in evaluating new ways to indemnify them for their participation in society. It helps them learn and others to learn about them. This may read invasive and unethical from a privacy stand-point. While that debate should be had, my stance in short: is that human-kind cannot achieve the interconnectedness it requires for distributing our relatively abundant resources through complete privacy or conservatism. Going forward, the next wave of value to exploit it not material but portable. Figure 3. Shows my Klout rating of 60/100 for influencing my social network. The question should be asked: who have I influenced? What decisions have they made based on my influence? Have they contributed to any gross domestic product (GDP)? Is that value portable?

klout

kred

Portable Value

In a short essay I wrote called “Portable Value”, influenced by Hernando de Soto I channeled his ideas that “adequate participation in an information framework that records ownership”, can spur economic growth. History shows that coinage in the exchange of good in local/international trade made portable wealth possible. The more transparent information-collection of purchase, stake holdings, and ownership of goods from legal-documentation to land to human-slaves made our modern economies grow. While I don’t agree with de Soto’s position on land titling and side with a more communal and democratic systems of collective land tenure because this offers protection to the poorest and prevents ‘downward raiding’ in which richer people displace squatters once their neighborhoods are formalized, I am aligned with the idea of an individual titling.

Neither de Soto nor his opponents wrote about individual titling specifically, and I’m not very fond of the phrase, but it’s fitting nomenclature assuming that they would have called the distributing of ownerships outside of land specifically some version of “individual titling” considering their democratic capitalism alignment. The significance here rest with ownership and the individual. The phenomenon of private ownership has pervaded and propelled the growth of humans and our technological extensions which make life more livable. Capitalism is the term of choice for the private ownership and trade of things. Per my views (@Ntegrationalism), Capitalism is merely an economic manifestation of human-kind’s technological evolution. While I’m aware of the rigid opposition to my last sentence, I’ve written it under the assumptions that

  • All things in existence are physiologically connected.
  • Humans cannot have nature.
  • Technology is deterministic when applied to the human condition.
  • Individualism spawns competition resulting in arbitrage.

Regarding information on ownership, economic growth requires a growth in participation of owners to in-turn expand the amount of wealth or wealth opportunities in the collective (system). Nostalgic and conservative ideas of constricting the potential growth of human-kind and the institutions that we’ve built is futile and unwise, as we live in a dynamic realm (world, galaxy, universe, multiverse) which renders life as we know it, unsustainable by definition. Even the home planet (Earth) warmed by the nearest star (Sun) will be an unsustainable body in due time. We need to be more agile in how we adapt to change.

As a species or parent of species, human-kind should be encouraged to compel as many participating owners of physical-properties (land) and nonphysical-properties (intellectual property, digital, and other) as possible to create a web of interconnected and integrated interest, per our vigilant growth. While land is scarce and in de Soto’s day, it was the end of the titling arguments, our ability to create valuable information and intellectual property has surpassed that of land property. The individual must be able to own the information that they distribute and monetize it. There is a firm called 4pay in Canada that aims to create the beginnings of a “data locker” by creating mobile applications that allow consumers to control transactions without giving personal or financial data to creditors or retailers. Knowing that this will be a heavy blow to the advertising industry and could hinder individuals from accessing valuable information on goods/services that they actually want and need, the delivery model may be flawed. While innovations away from the existing supply chain may prove formidable, I think that some legal and financial incentives to provide individuals with their own information footprint have to be implemented at the local and international scale not to protect the individual, but to empower them. Individuals have to know when they are being used as insights to make decisions about their peers lives.

technop

Most of us know helium as that cheap inert lighter-than-air gas we use to fill party balloons and inhale to increase voice-pitch as a party trick for kids. However, helium has much more important uses to humanity — from medical (e.g. MRIs), military and defense (submarine detectors use liquid helium to clean up noisy signals), next-generation nuclear reactors, space shuttles, solar telescopes, infra-red equipment, diving, arc welding, particle physics research (the super-magnets in particle colliders rely on liquid helium), the manufacture of many digital devices, growing silicon crystals, the production of LCDs and optical fibers [1].

The principal reason helium is so important is due to its ultra-low boiling-point and inert nature making it the ultimate coolant of the human race. As the isotope helium-3, helium is also used in nuclear fusion research [2]. However, our Earth supplies of helium are being used at an unprecedented rate and could be depleted within a generation [4] and at the current rate of consumption we will run out within 25 to 30 years. As the gas is often thought of as a cheap gas it is often wasted. However, those who understand the situation, such as Prof Richardson, co-chair of a recent US National Research Council inquiry into the coming helium shortage, warn that the gas is not cheap due to the supply being inexhaustible, but because of the Helium Privatisation Act passed in 1996 by the US Congress.

Helium only accounts for 0.00052% of the Earth’s atmosphere and the majority of the helium harvested comes from beneath the ground being extracted from minerals or tapped gas deposits. This makes it one of the rarest elements of any form on the planet. However, the Act required the helium stores [4] held underground near Amarillo in Texas to be sold off at a fixed rate by 2015 regardless of the market value, to pay off the original cost of the reserve. The Amarillo storage facility holds around half the Earth’s stocks of helium: around a billion cubic meters of the gas. The US currently supplies around 80 percent of the world’s helium supplies, and once this supply is exhausted one can expect the cost of the remaining helium on Earth to increase rapidly — as this is in all practicality quite a non-renewable resource.

There is no chemical way of manufacturing helium, and the supplies we have originated in the very slow radioactive alpha decay that occurs in rocks. It has taken 4.7 billion years for the Earth to accumulate our helium reserves, which we will have exhausted within about a hundred years of the US’s National Helium Reserve having been established in 1925. When this helium is released to the atmosphere, in helium balloons for example, it is lost forever — eventually escaping into space [5][6]. So what shall we do when this crucial resource runs out? Well, in some cases liquid nitrogen (−195°C) may be adopted as a replacement — but in many cases liquid nitrogen cannot be used as a stand alone coolant as tends to be trickier to work with (triple point and melting point at around −210°C) — so the liquid helium is used because it is capable of staying liquid at the extreme cool temperatures required. No more helium means no more helium liquid (−269°C) that is used to cool the NMR (nuclear magnetic resonance apparels), and in other machines such as MRI scanners. One wonders therefore must we look towards space exploration to replenish our most rare of resources on Earth?

Prepare Uranus - A view of Uranus

Helium is actually the second most abundant resource in the Universe, accounting for as much as 24 percent of the Universe’s mass [7] — mostly in stars and the interstellar medium. Mining gas giants for helium has been proposed in a NASA memorandum on the topic [8] which have also have great abundance of this gas, and it has been suggested that such atmospheric mining may be easier than mining on the surfaces of outer-planet moons. While this had focused on the possibility of mining Helium-3 from the atmosphere of Jupiter, with inherent complications of delta-V and radiation exposure, a more appropriate destination for mining regular helium may rest with the more placid ice-giant Uranus (not considered in the memorandum as the predicted concentration of Helium-3 in the helium portion of the atmosphere of Uranus is quite small). Leaving aside specific needs for Helium-3 which can be mined in sufficient volume much closer — on our Moon [9], a large-scale mining mission to Uranus for the more common non-radioactive isotope could ensure the Earth does not have to compromise so many important sectors of modern technology in the near future due to an exhaustion of our helium stock. A relatively lower wind speed (900 km/h, comparing favorably to 2,100 km/h on Neptune), with a lower G-force (surface gravity 0.886 g, escape velocity 21.3 km/s) [10] and an abundance of helium in its atmosphere (15 ± 3%) could make it a more attractive option, despite the distances (approx 20 AU), extreme cold (50-70K) and radiation belts involved. Rationalising complexities in radiation, distance, time and temperatures involved for human piloting of such a cargo craft, it could be considered more suited to an automated mission, remote-controlled under robotics similar to orbiter probes — even though this would introduce an additional set of challenges — in AI and remote control.

However, we have a Catch 22 — NASA space programs use the gas to aid their shuttles [12]. Liquid fuels are volatile. They are packed with corrosive material that could destroy a spacecraft’s casing. To avoid this problem, a craft is filled with helium gas. If this could be replaced in such shuttles with some alternative, and advances in space transportation made to significantly increase the cargo of such ships over interplanetary-distances, perhaps a case could be made for such ambitious gas mining missions, though at present given current NASA expenditure, this would seem like fantasy [13]. Realistic proposals for exploration of Uranus [14] fall far short of these requirements. Helium is a rare and unique element we need for many industrial purposes, but if we don’t conserve and recycle our helium, we are dooming mankind to a future shortage of helium, with little helium left for future generations here on Earth [15] — as for now, replenishing such from space seems like a rather long shot.

————————————————

[1] 8 Surprising High-Tech Uses for Helium — TechNewsDaily
http://www.technewsdaily.com/5769-8-surprising-high-tech-helium.html
[2] Helium-3 as used in Nuclear Fusion Research
http://en.wikipedia.org/wiki/Helium-3
[3] The world is running out of helium — Nobel prize winner Prof Robert Richardson.
http://phys.org/news201853523.html#jCp
[4] The Federal Helium Reserve
http://www.blm.gov/nm/st/en/prog/energy/helium/federal_helium_program.html
[5] Why the World Will Run Out of Helium
http://scienceblogs.com/startswithabang/2012/12/12/why-the-w…of-helium/
[6] Will We Run Out of Helium?
http://chemistry.about.com/b/2012/11/11/will-we-run-out-of-helium.htm
[7] Where Is Helium Found — Universe Today

Where is Helium Found


[8] Bryan Palaszewski. “Atmospheric Mining in the Outer Solar System“
http://www.grc.nasa.gov/WWW/RT/2005/RT/RTB-palaszewski1.html
[9] Mining the Moon for Helium-3 — RocketCitySpacePioneers
http://www.rocketcityspacepioneers.com/space/mining-the-moon-for-helium-3
[10] Uranus — Physical characteristics
http://en.wikipedia.org/wiki/Uranus
[11] Uranus’s Magnetosphere — NASA Voyager VPL
http://voyager.jpl.nasa.gov/science/uranus_magnetosphere.html
[12] Space shuttle use of propellants and fluids — NASA KSC
http://www-pao.ksc.nasa.gov/kscpao/nasafact/pdf/ssp.pdf
[13] Project Icarus: The Gas Mines of Uranus
http://news.discovery.com/space/project-icarus-helium-3-mining-uranus-110531.htm
[14] The case for a Uranus orbiter, Mark Hofstadter et al.
http://www.lpi.usra.edu/decadal/opag/UranusOrbiter_v7.pdf
[15] Why the World Will Run Out of Helium
http://scienceblogs.com/startswithabang/2012/12/12/why-the-w…of-helium/

Originally posted as Part IV of a four-part introductory series on Bitcoin on June 19, 2013 in the American Daily Herald. See the Bitcoin blog for all four articles.

Prologue

I am reminded of Sisyphus, King of Ephyra (later, Corinth), who was referred to by Homer as the craftiest of men. He committed terrible crimes against mere mortals and ‘worse’ still, and with great cunning, he offended Zeus and cheated Death. For his crimes he was eternally condemned to thrusting a heavy boulder up a hill, only having it come rolling back down as he got near the top. Had his earthly actions against his fellow men not violated the non-aggression principle, I could have probably warmed up to him as some sort of tragic hero, doing all he can to live life as he wanted it, while beating the gods at their own game. But given his crimes as a ruler over men, it does seem appropriate that his punishment is an ever-repeating cycle of arduous labor, engendering within him hope of a brighter future, yet concluding with dashed dreams and a return to square one. After all, to this day, rulers are notorious for repeating past mistakes while expecting different outcomes (a condition humorously defined by Einstein as insanity).

National currencies

Argentineans have had a troubled relationship with their money over the last half century. The Argentine Peso has been revalued numerous times, with 13 zeroes having been dropped (a devaluation factor of 10 trillion) since 1969. Last month the ‘blue dollar’ (the black market price of US dollars) hit 10 peso, whereas the official exchange rate was half that, at around 5 peso, causing speculations of further devaluations. Devaluating the Argentine Peso is a Sisyphean task if there ever was one. Tragic, to be sure, but would have been comic too if so many real people weren’t hurt so badly by this inevitably repetitive chain of events.

The Argentineans are trying to get dollars because these are more stable than the peso. Had they been free to hold any currency they wished, the peso would have gone down the proverbial toilet as ever more people protected their assets by divesting away from the troubled currency. Instead, the populace is forced to hold only the peso, thus the tragedy continues, hitting hardest the honest and naïve, who cannot or do not want to go down the black market route. If government wanted the best interest of their people, they would let them hold the dollar. In the name of patriotism, having a national currency is clearly more important than the welfare of the people.

While not as bad, in the U.S. some don’t think the dollar has great prospects. A preferable alternative would be gold or something else that maintains its value. The truism still holds that if government, here, wanted what’s best for us, they would let us hold gold without the penalty of a 28 percent tax, or they would let us transfer our wealth to Bitcoin without targeting exchanges and denying what would otherwise be a purely voluntary free-market transaction. The fact that the peso in Argentina, the dollar in the U.S. and all legal tenders in their respective countries have to be protected by the full might and force of the law illustrates clearly that national currencies are relatively worthless and that, given the choice, many people would not be holding them.

Then why are legal tender laws and ‘forced’ national currencies so commonplace in this enlightened age? What is it that makes them so irresistible to the legislators who dictate what is right and wrong for us (not them) to do? If an unavoidable consequence of the ongoing monetary printing press is constant inflation and potential revaluation of the currency, what is it about printing your own money (and preventing others from doing the same) that is so desirable to the political elite? To ask that question is to answer it. Everyone, if they could get away with it, would want to counterfeit money or add a few zeros to their bank account balance. However, creating money from thin air is fraudulent and immoral regardless of who does it. The outcomes of private individuals counterfeiting money include buying a new car or a new house. The implications of government being able to print its own money are far worse. These include funding wars, enriching the politically well-connected and creating policies which favor one class of citizens at the expense of another class (both of which, by the way, represented by the very same government), for example: consumers vs producers; importers vs exporters; home owners vs renters; and the list goes on.

The only alternative that is both morally superior and economically sound, ensuring no person or group of people can defraud one group and enrich another, is having either one or a competing set of commodity monies (virtual or physical commodities) whose creation and dissemination are dictated by the forces of a voluntary and free market. The number of competing currencies will also be dictated by the free market, much as how the number of shoe manufacturers, software developers and security services are not centrally planned.

The alternatives for national currencies

It goes without saying that gold and silver would be the first in line to become functioning money the world over if national currencies are no longer protected by law. These are the epitome of sound money and they are not tied to any single nation. But can Bitcoin play a role as one of a competing set of sound, international currencies?

I do believe Bitcoin has what it takes, as I’ve written previously. Despite it being virtual, Bitcoin can acquire value. Value, after all, is an attribute given to a scarce good by individual actors in the marketplace. Anything subject to finite supply and demand will acquire some value. Hence scarcity is key, rather than tangibility. Bitcoin meets all of the requirements for a medium of exchange and potentially money in the future (depending on its adoption). Furthermore, while it did not arise as a commodity with alternate uses – as gold did – Bitcoin is a different and new breed of money, and it can still fulfill the role it seeks. More generally, an economy of commodity money would naturally tend towards deflation. While not solely a Bitcoin phenomenon, it is favorable for the value for each money unit to continually rise, in contrast to the inflationary environment around us. Bitcoin’s divisibility ensures that no matter how high the value goes, Bitcoin is still perfectly usable. Objections have been raised about its volatility since money must be stable. This is true, but we must appreciate that its current volatility is simply a symptom of the pre-adoption stage. Any newly discovered commodity will have a period of extended volatility as people try to contend with its potential on one hand and the uncertainty on the other. As Bitcoin becomes better known, more readily accepted by the common man and as uncertainties subside, the volatility will decrease to levels of your average foreign currency. I contend that this is no insurmountable challenge for Bitcoin since it is a built-in payment system as well as the money itself. While people may refrain from holding it long-term or price their goods solely in Bitcoin, people can convert in and out of the currency and use the Bitcoin payment system while denominating their goods in stable currencies.

Whether in small drops at a time or in large torrents all at once, Bitcoin is being adopted by people who have realized its advantages. Some with the need for international money transfer appreciate the cheap and almost instantaneous global transmittal; those with privacy concerns flock to it for its virtual anonymity; and then there are the ones who are tired with the banking system’s fees or afraid of its potential bank runs who realize they no longer need a bank to store their money.

People are voting with their cash and showing that Bitcoin can indeed fill the need. There are those who use it as a store of value/potential speculation and there are those who use it to spend. The hoarders increase its value and the spenders increase its popularity. Eventual equilibrium, as always, is reached between spending and saving where the supply and demand curves for Bitcoin meet…that is, assuming a free market.

Free markets can make or break a currency

Legal tender laws, taxes on precious metals and regulation of firms dealing in Bitcoin all manipulate the supply and demand curves of money and of non-monetized goods. However, they won’t eliminate the demand of the forbidden fruit altogether. One needs only note the prevalence of speakeasies during the Prohibition era to understand that it is not in the human nature to simply abide by arbitrary legislation. It is quite evident that fewer people in Argentina want the peso, hence the market for a ‘blue dollar’. In much the same way, in various circles, fewer people in the US want dollars. Fortunately our alternatives (such as Bitcoin, gold and silver) are not yet illegal, which makes me a proponent with a clear conscience.

On the face of it, when commodity prices rise, they are simply more valuable. But when prices rise for Bitcoin, gold and silver (which are commodities with a history or express purpose of being money) this shows they are more desirable than peso, dollar and pound. Small fluctuations mean nothing, but large movements like those seen over the course of a month for Bitcoin and over the course of 5 years for gold makes you think whether these commodities are becoming ‘monetized’.

Fiat money (e.g. national currencies) hangs on the faith people have of it. If the faith goes, the value of the fiat money will plummet like a rock. When a currency experiences this sudden and aggressive drop, it is defined as hyper-inflation. This can simply be thought of as ‘hyper demonetization’ of the currency in favor of a replacement commodity money that gets monetized or replaced by barter conditions. Any fiat money could be subject to this, given the right environment. As long as the U.S. dollar is the world reserve currency, circumstances must become drastically worse for gold or Bitcoin to unseat it but the potential is always there. All it takes is enough people to lose trust. Take, for instance, the official national debt. At $16.7 trillion, this is a sum that can never be repaid (let alone if you include Social Security liabilities and other ‘off-the-books’ debt totaling an estimated $222 trillion), no matter how much you tax or how little you spend. To illustrate with an extreme scenario, by taxing 100 percent of the U.S gross national income and eliminating spending altogether, the U.S. is still left with a $1.5 trillion debt! To pay its debt the government is putting one credit card’s bill on another credit card. Needless to say, the thread by which fiat money is hanging is thin and flimsy. It won’t take much to snap.

As noted, individual people are realizing there is something amiss and are moving to gold, silver or Bitcoin. The Chinese government (saddled with more than $1.2 trillion in U.S. bills, notes and bonds) is showing it wants out too, while being conscious not to cause panic and hurt itself. The heavily censored nation aired a documentary last month on its state-run TV informing its populace about Bitcoin (!) and it allows (possibly even encourages) the purchase of gold and silver from local Chinese banks. Clearly the largest holder of U.S. debt is trying to divest away from the dollar. Central banks are buying gold like there’s no tomorrow. Clearly the ‘banks of the banks’ know that even paper money must be backed by real money.

Sure enough, Bitcoin is the big unknown and it is fraught with legislative risk. And, yes, gold and silver prices have seen better days. Hardly anyone alive today knows what it is like to live in a world of sound money. But as Hamlet asks, “[what] makes us rather bear those ills we have, than fly to others that we know not of”? In the long run, even Sisyphus would give up on any attempts to maintain a paper money. Whether or not one holds real assets to preserve material wealth, the first stage to anything is educating oneself to the options out there and to the reality at hand. The greatest amount of wealth is that which is contained in one’s mind. The emergence of Bitcoin, for its part, has got a lot of people thinking, and that alone has made all those involved more wealthy.

Originally posted as Part III of a four-part introductory series on Bitcoin on May 21, 2013 in the American Daily Herald. See the Bitcoin blog for all four articles.

With gold prices back in the $1,300-$1,400/oz range it is sometimes difficult explaining to non-gold bugs why owning physical gold is still a good long term strategy. Some define buying gold as ‘an investment’, and others as ‘a hedge against inflation’. I tend to look at it as an insurance policy against hyper-inflation or just simply as sound honest money. However, when describing a strategy of accumulating money (in gold form) in some far-away vault, only to be used in some end-of-the-world scenario, it goes without saying that an image of a miserly old man replaces my likeness in the eyes of my conversation partner. Few people stuff dollar bills in their mattress any more, but hoarding of gold and silver when these were de-facto money was not unusual. Commodity money, which tends to increase in purchasing power over time, is predisposed to this ‘problem’. When you ‘love money’ so much that you hold on to too much of it or for too long a time, then you are hoarding.

Can ‘hoarding’ be defined?

Robert LeFevre once joked that while he was courting his soon-to-be-wife, he was impressed when she told him how much she loved money. Yet after they were married, it turned out that she really didn’t love money. In fact, she would try to find any excuse to get rid of it… in her shopping sprees, of course! Apparently money is no different than other goods and services; you trade one for the other. You trade the lesser valued good for the more valued good. When you make a purchase, you make a choice. You value your money less than the good you are buying. Similarly, when you refrain from purchasing an item, the indication is that your money is of more value than the foregone good. This is the basic premise in anticipation of a transaction, that both sides benefit – otherwise the transaction would not take place.

Hoarding money, be it paper, an electronic account balance, gold or bitcoins is therefore just the same as buying an excessive amount of books, stockpiling on your favorite pasta sauce jars when they’re on sale or refraining from throwing out your old National Geographic magazines. You never know when you might need them. You just prefer what you are hoarding to the alternatives out there. A larger stash of money means you prefer saving the money you have now for a later monetary exchange. That monetary exchange can be a purchase, paying your employee’s wages or giving your granddaughter a gift. But the amount someone saves/hoards is a reflection of their preferences and their understanding of reality with its inevitable uncertainties (and uncertainty is in no short supply these days). The negative term ‘hoarding’ is used, as Rothbard noted, when you are keeping more cash than someone else thinks is appropriate for you to keep. How very objective.

In actual fact, if a significant amount of money is hoarded and ‘taken away’ from circulation, the result is that there is an increased demand for money, which, in a world absent of price and wage controls, results in falling prices. Said differently, the purchasing power of money increases, meaning one would be able to buy the same amount with fewer money units. No evil has been perpetrated.

The dreaded ‘deflation’

The general decline of prices is described by mainstream economists as deflation. According to the Austrian School, on the other hand, deflation is merely the reduction of the money supply. Whether through significant hoarding, widespread bankruptcies or Federal Reserve actions, a drop in the money supply would cause a drop in prices, all else being equal. The distinction is that falling prices are the effect, not the cause. The effect could have other (often positive) causes, such as increases in productivity – the reason for falling prices in the high-tech world, for instance. In a market unhampered by political forces, as long as the quantity of goods rises relative to the quantity of money, prices will fall and the value of money will rise.

A common misconception is that reduction in prices equates to reduced profits and a general decline in the economy. ‘Revenues are not profits’ is one of the first things young accountants learn. Profits are a product both of revenue and of expenses, the money coming in and the money going out. With an increased purchasing power of money, input costs fall as well. Profits can and are made in a deflationary environment. The dreaded ‘deflationary spiral’ is a situation where a drop in prices leads to reduced demand, leading to more drops in prices as well as layoffs, which further hampers demand, and so the situation exacerbates itself. This scenario may occur when the general environment is an inflationary one, where people generally expect prices to rise as a normal, natural phenomenon. Then, through a deflationary cause, symptomatic of an ailing economy (e.g. widespread bankruptcies, rather than increased productivity), prices temporarily start to drop. Most people will see this as a temporary drop and will therefore postpone purchases. However this scenario cannot be an ongoing condition – eventually people need to start buying. In contrast, where the environment is deflationary (e.g. the high-tech industry), the assumption is not that ‘prices must rise’ and that ‘the drop is temporary’. How long has anyone really put off buying a computer, knowing that if they wait just one more month, they’ll get a better one? Eventually, you live with the fact that prices fall. And should prices drop due to positive causes, such as increased productivity, falling prices would actually engender demand. Increases in demand will ensure the firms’ profitability and the workers’ employability.

Deflation is not as bad as you think…

As we have seen, if the general economic environment is one of falling prices and the increase in money’s purchasing power, people would not continuously put off making purchases. Profits will be readily made as goods will cost less and practically create their own demand. But this is not all. Holding on to your money is like having a savings account or owning bonds. Saving for a nest egg in a deflationary environment does not require a high risk approach. Merely setting aside a part of one’s paycheck each month will yield more than social security ever could.

A further impact is that as people save more, interest rates fall. This drop in interest rates is a scenario that central banks across the globe are trying to replicate by ever more money printing. However, a naturally occurring low interest rate does not harm the holders of money much like the coercive version we see before us. Though deflation is thought to be bad for borrowers, debt would actually be cheap and readily available. If profits are made, debt will also be more easily repaid. True, a bad deflation (one which results from bankruptcies and economic woes) is generally bad for borrowers, since the real value of their debt rises and they have no additional profits and cash-flow to enable its repayment.

During inflation, on the other hand, money loses value. There is no doubt that the opposite scenario of constant inflation would be good for borrowers, regardless of the state of the economy. Is it any surprise that a government indebted to the tune of $16.7 trillion would prefer inflation to deflation? Where money is not a commodity, but is 90% debt (due to banks’ 10% reserve requirement), is there any surprise that anyone in the economics profession but the very fringe would tout inflation over deflation?

…but they still make you think it’s bad

The case for inflation and against hoarding or deflation is normally made more through an appeal to emotive factors than to the intellect. ‘Unspent dollars means reduced sales, drops in profit and massive layoffs. If firms go bankrupt, the raw material, capital goods and factories vanish into thin air’. You wouldn’t want that, would you? We already showed that increased saving on a massive scale and a reduction in the money base relative to the goods on the market, in and of itself, would only affect the purchasing power of the money and would not affect sales or profits. Companies may or may not go bankrupt – it all depends on whether their products satisfy the customers, not on quantity of money ‘in circulation’. Assets of those companies that do go bankrupt will only be bought up by another group of people who will try to utilize them better by building a better or cheaper product. Those parts of the economy that people do not value will get a signal that their value is dropping. These signals are important for the efficient functioning of the economy and for the satisfaction of the population at large. Where this signal is manipulated through injection of money into the economy or unnatural interest rate manipulations, a boom occurs, naturally and inevitably followed by the bust.

Going back to their arguments, that money must therefore be spent, is quite the visceral argument since everyone is an employee and everyone’s livelihood depends on other people spending money on them. It appeals to the desire for people to get something for nothing, or at least to earn money for as little work as possible. But in a free market, where people are not forced to buy a good they do not value, the customer is always right. You do your utmost to ensure you appeal to potential or repeat customers. An entrepreneur and all of her employees must strive for others’ satisfaction in order to make a profit – and many do so, successfully. There are no shortcuts in the lives of truly free market participants; you cannot force someone to fork over their money against their will (the case, of course, being different for government agencies funded through taxation). Yet the lazy slob in us all desires just this and the tool to achieve this is inflation. Through a constant devaluation of money’s purchasing power, people trade their money for real goods and services as fast as they can, thus ensuring dollars are not left unspent. Inflation causes fear-driven spending. ‘Spend now before it’s too late and your money becomes worthless’. A mild form of inflation would have the monetary base rise at the same level as ‘economic growth’, thereby keeping the purchasing power relatively stable, but the practical difficulties and the moral dubiousness of robbing one of their money’s value is still present.

An appeal to the intellect and common sense

Money, as a transmitter of value through space and time, must be ‘hoard-able’. It has to be durable so that one can hold on to it without its value dwindling. Holding on to depreciating money is like storing your candles all lit – not the best long-term solution. As I tell my non-gold bug friends, holding on to money in the form of gold is a good long-term strategy. It cannot be printed at will, its production is subject to free market forces of profit and loss, and its purchasing power increases over time. Who would not want money that increases in value? If you are uncertain of the future, the market or the economy, hoard away. One must put aside the red herrings incorporated into the inflationists’ arguments which lead to conclusions that: deflation is evil, saving is bad, debt is good, spending is necessary, etc. Savers, who forego current pleasures and build up future capital, are the backbone of a strong economy. As Doug Casey said, “You don’t become wealthy by spending and consuming, you become wealthy by producing and saving”. As my parents repeated to me time and again, “You cannot spend what you do not have”. And as common sense dictates, “You cannot borrow what someone else hasn’t saved”. Sound money is worth its weight in gold. Resist the arguments put forward on behalf of entities that are massively indebted – there is no evil in hoarding.