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Worth clarifying Zoltan's recent Bretton Woods III note where he implied that gold reverts back to a reserve status in combo w a new multipolar system.
I actually spoke w him about his skeptical comment re BTC.
🧵👇
I actually spoke w him about his skeptical comment re BTC.
🧵👇
I want to now share this convo as I think its an important junction we find ourselves, and ideas make actions.
Zoltan argues that real goods & services, namely commods set price, and if you bifurcate them, will need an outside source to clear these imbalances, namely China.
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Zoltan argues that real goods & services, namely commods set price, and if you bifurcate them, will need an outside source to clear these imbalances, namely China.
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This view has begged the Q as to where BTC fits into such a new regime?
Unfortunately Zoltan hasn't done the work on BTC and like many others, has made up his mind regardless But, his framework flags very important theme on cause of all these crises each time: Fungibility
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Unfortunately Zoltan hasn't done the work on BTC and like many others, has made up his mind regardless But, his framework flags very important theme on cause of all these crises each time: Fungibility
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If money is fungible, system can operate smoothly. If it and the collateral supporting it lose this attribute, things go to hell b/c the system is interconnected. Inflation also fits this: When there's embedded high inflation, future money loses fungibility vs present money.
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Zoltan responded to some inquiry on his BTC comment (he said "if bitcoin still exists"), with the following retort:
"We are re-learning the theme that a SOVEREIGN HAS TO BE INVOLVED WITH THE QUESTION OF MONEY and Bitcoin is basically short the sovereign (conceptually).”
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"We are re-learning the theme that a SOVEREIGN HAS TO BE INVOLVED WITH THE QUESTION OF MONEY and Bitcoin is basically short the sovereign (conceptually).”
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I told Zoltan that I thought “short the sovereign” is VERY much the wrong hat to be wearing when thinking about BTC .. Here is what I said to him:
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"I think the key point you’re missing though is what the system actually needs to find equilibrium again. You yourself coined this as Bretton Woods version 3.0 basically. Well, what was BW to begin with?"...
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.."It was a new equilibrium to short circuit the race to the bottom that the global financial system had found itself, with bad incentives that benefited adversarial behavior above cooperation."
...
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...
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"BW changed this incentive. But it had hidden costs. BW2 tried rebalancing those hidden costs, but it too had hidden costs"
Now we find ourselves at a crossroads again as the the current system is forcing escalation & geopolitical bifurcation which leads only to bad places. "
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Now we find ourselves at a crossroads again as the the current system is forcing escalation & geopolitical bifurcation which leads only to bad places. "
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"None of the solutions you mention do anything new here to rebalance those incentives toward equilibrium.
They only further the divides by creating a multipolar monetary structure."
..
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They only further the divides by creating a multipolar monetary structure."
..
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"Bitcoin is the equivalent of a new global Bretton Woods - an acknowledgment for the need for a unitary monetary system that incentivizes cooperation, and not a zero-sum, unwinnable race to the bottom"
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"The cynical view would be that perhaps we need to remind ourselves what that race looks like before remembering this. War, carnage, economic turmoil and chaos, a la WW2. But I certainly hope not!"...
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"Euro-dollar renminbi is not an equilibrium.
Gold-based systems have been tried and failed.
These are antiquated and centralized systems."
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Gold-based systems have been tried and failed.
These are antiquated and centralized systems."
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"3 nations hold the vast reserves of gold on this planet: US, Russia and China.
"How does a system like this not lead to MORE centralization and MORE turmoil b/w ideologically opposed systems? Especially when one cannot verify or easily take delivery on such collateral."
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"How does a system like this not lead to MORE centralization and MORE turmoil b/w ideologically opposed systems? Especially when one cannot verify or easily take delivery on such collateral."
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Unfortunately, Zoltan responded to this w/ a dismissive Tolstoy quote:
'"You can explain the most complicated of things to a slow witted man, but you can’t explain the simples of things to a man who has already made up his mind”
You and I both made our minds.'
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'"You can explain the most complicated of things to a slow witted man, but you can’t explain the simples of things to a man who has already made up his mind”
You and I both made our minds.'
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To which I replied...
'Our opinions matter not.
“A single clear idea, well fed, moves like a contagious disease“- Robert Bly
We agreed to talk more about bitcoin over lunch some day. Hopefully an orange-pilled lunch.
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'Our opinions matter not.
“A single clear idea, well fed, moves like a contagious disease“- Robert Bly
We agreed to talk more about bitcoin over lunch some day. Hopefully an orange-pilled lunch.
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In summary, gold may be the collateral choice for today's immediate crisis, but history shows that what wins are the innovations that actually solve a problem. Gold is no such innovation in the quagmire of the 21st century. It is 1 step backward.
Bitcoin is 2 step forward
Bitcoin is 2 step forward
Gold bugs and CBs perhaps have made up their minds, but 7B individuals and investors have not.
@ck_SNARKs @AnselLindner and @LukeGromen recently had a good convo on some of these issues on @BitcoinMagazine FedWatch pod. Highly recommend listening to that conversation also.
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@ck_SNARKs @AnselLindner and @LukeGromen recently had a good convo on some of these issues on @BitcoinMagazine FedWatch pod. Highly recommend listening to that conversation also.
/end
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Mark Moss @1MarkMoss
·
Mar 12, 2022
Great thread Aaron, hope you get that lunch!