34 - Phuket - rest and relaxation
🇹🇭 Saturday morning we were up early to get out to Chatuchak weekend market. It is an easy ride out there on the MTR and we got there around 0900 in time to enjoy the opening up for the weekend. Happy to report that it seems to have survived quite well and there was much more open than I had expected. That said, also quite a few shuttered shops that were being used as hanging space by the shops that were open next door. Walkabout here.
Sunday we were also up early to get to the airport to head down to Phuket for a bit. Domestic airport in Suvarnabhumi is quick and easy. You have only boarding card check to go airside and security is only when you head out near the gates. The flight was 90 mins down south and we left pleasantly dry weather in Bangkok to arrive in heavy rain. It sure was a wet week that followed!
It is still rainy season here and it doesn't half rain! Even compared to HK red and black rain it is heavy here and relentless - going on for day after day. Plenty of flooding here but they seem to take it in their stride and it is especially nice to swim in the outdoor pool in the rain - something you are not allowed to do in HK!
We are here to focus on health and fitness and getting a proper break from things - so we will be here for while and changing gears - focussing on what is important for us. I am doing a couple of yoga sessions every day as well as general fitness, walking, swimming and healthy eating. I even managed to do my first aerial yoga sessions this week - very nice! Meeting many interesting people here too - as you might imagine quite a few others are fed up with the nonsense going on at present and it is good to discuss and share experience and understanding.
Spotify seems to be the ruler everywhere recently - the free version that is. It has been playing in every taxi, grab and uber that we have been in recently and it plays in the resorts and bars here in Phuket. Every few minutes they try to explain why the premium version is better but nobody seems to bite! It you are looking for a free alternative interesting choices seem to be Deezer and Jango.
Also being so far South in Thailand you get wakened for prayers at 5am!
Read of the week
With travel and settling in, meeting people etc this week I did not get to any new book but I did re-read Lyn's paper What is Money Anyway.
This is is absolutely the best A-Z explainer you will find and well worth taking the time to read and understand it carefully - everyone will learn something from it. You might prefer to have Guy read it to you.
Lyn's paper walks through the history of monetary transitions from the lenses of a few different schools of thought (often at odds with each other), and then examines the current and near-term situation as it pertains to money and how we might go about investing in it. Start from the beginning or jump to the chapter you want:
- Chapter 1: Commodity Money
- Chapter 2: Fiat Currency
- Chapter 3: Digital Assets
- Chapter 4: Final Thoughts
I do encourage you to take the time to go through Lyn's paper - you mind will be boggled about what you have not been told or understood about how the system works. You will gain understanding into why a lot of things happen the way they do - for example: inflation, taxes and wars.
Understanding Money and Bitcoin
You will recall that last week we discussed about what makes sound money - you should remember that sound money behaves as:
- Store of Value - first and foremost, money allows you to store value that results from your effort/time/work or from exchange of some valuable good or property
- Medium of Exchange - you can exchange things of value for money and vice versa. This happens through an agreed "exchange rate" - for example an hourly or daily rate or a "price" for some good or property.
- Unit of Account - it should be widely recognised as an unambiguous unit of measurement
Let's go over your homework and compare Cash and money in the bank against these.
- Cash and bank accounts perform rather poorly as store of value - your purchasing power decreases over time through inflation. Consider this visualisation that shows how the US Dollar purchasing power has decreased over time (pretty much all other national currencies have done worse for reasons that we can go into - comment below if you are interested).
- This chart also includes a number of key dates - we still need to get a chart updated for the recent wars (war on the Virus, War on Terror, War in Afghanistan, War in the Middle East, War in Ukraine, War on Domestic terrorism... ) - my expectation is that the value would be down to about $0.01 by now given the money creation that has been done since 2013. The main reason for this poor performance is that the government simply keeps creating more money and this devalues the money that eveyone holds - you may well have noticed a lot of money creation recently and the effects that has.
- Something that most people do not consider is that money held at a bank is subject to an additional risk called counterparty-risk. It can be that the bank goes bust or the government tells them to block your account and you will immediately lose access to all your money and savings. You might think this does not happen but ask those in Cyprus (or recall Northern Rock) and ask the Canadians (truckers and friends) - they all have horror stories to tell. Perhaps you have tried to make a large withdrawal or transfer only to have days of delay and interrogations?
- Cash too suffers similar fiat-risks - the government simply declares the notes and coins as being invalid from some date - the only way to retain any value is to take the cash into a bank, go through KYC and all sorts of rituals; they may issue you new cash or they might just decide to block your account once the money has been taken by them. If you think this would never happen - just ask the Indians about their 500 and 1000 Rupee notes and ask Europeans about the 500 EUR notes (and here). Ask the people in UK about the change or Monarch and how that will affect their cash - note that they have not yet determined a validity date but expect that to come like the recently did with paper UK notes when you had 100 days to turn in your old money. Any excuse is good for governments to do this so be prepared.
- UK people will likely well remember decimalisation and how much more expensive things have become since then when most things cost a few "new pence".
- Europeans will remember the conversion to EURO and how everything seemed to magically increase in price as prices got rounded up and people lost their points of reference.
Bottom line - cash and bank accounts are rather poor store of value - they do perform quite well as medium of exchange and unit of account. Money in bank accounts is better suited for international transactions which must happen over large distances - cash works well for in-person exchanges.
Gold vs the criteria
Let's look at gold vs the criteria - as a store of value gold does rather well - see this chart that shows how much gold you need to buy a bushel of wheat. Recall that this is what Jeff Booth argues in his book - The Price of Tomorrow - namely that with increasing efficiency the cost of goods in sound money should decrease over time. Your gold has never bought you more wheat (and many other things)!
- But gold does not perform so well as medium or exchange Unit of account - it comes in discrete amounts that are not easily divisible and it is not easy to buy small quantities of anything with it. Also it is extremely difficult to verify if what you have is real gold or something else (eg Tungsten). Also it is not convenient for international transactions - unless it is dematerialised into "bank money".....and this leads to the problems of fractional reserve banking and bank runs - you may well get to experience this soon.
BTC vs the criteria
In 2009, Satoshi Nakamoto (Bitcoin’s pseudonymous creator) created Bitcoin. Although Bitcoin was not the first digital currency, it was the first cryptocurrency that could satisfy the majority of the properties that make up sound money. This was possible because it was digitally programmable and operated on group consensus– it could be programmed in a way that overcame the failures of its predecessors and gave power to the community. Bitcoin would be a truly scarce, tamperproof asset with a publicly visible supply that no one could alter. It is, therefore, impossible to dilute or tamper with in the same ways that were endemic in previous forms of money.
Bitcoin is a digital bearer instrument, which means there is no need for trusted third parties or intermediaries. The participants on the network enforce the rules through consensus– the monetary policy is controlled by those participating in the ecosystem. That means no reliance on gold warehouses or governments.
As Bitcoin exists outside of the control of governments and central banks, it is being widely adopted as an alternative monetary system for the very reason that it is unable to be manipulated. For the first time since we left the monetary metals, we have a sovereign form of money that gives control back to the individual.
Since 2009, without any major technical flaws, hacks or issues, Bitcoin continues to grow in its acceptance, adoption, and optionality as a monetary good. Bitcoin is currently growing in adoption at 137% compared to 76% for the growth of the internet at the same age.
It should be noted that while other cryptocurrencies have been introduced in recent years, none challenge Bitcoin’s stance as a superior monetary good. Bitcoin advocates would say this is because:
- Its supply cannot be diluted or expanded – since every user would have to agree to devalue their own money for no gain.
- To control the Bitcoin network would require billions of dollars in processing equipment, secrecy, and millions of bitcoin users worldwide.
- It has the largest network effects and user base.
- Other cryptocurrencies are usually either not a fixed supply or controlled by a small group of users – which is the very reason the previous forms of money have failed.
- As the network grows, along with knowledge and acceptance – its value proposition and security will continue to strengthen.
The table below summarised bitcoin's properties vs those of sound money.
Do comment or ask any questions below - happy to discuss and explain further. In subsequent weeks we will cover frequently asked questions including:
- where do bitcoins come from?
- how can I obtain bitcoin?
- how and where to safely store your bitcoin?
- how to spend bitcoin and use it for transactions or exchanges of value?
- ...and any other questions you may have - ask them below
🎓 Reading, listening and learning
Below are some interesting resources that I came across, or was reminded of, in the past week - for your enjoyment and edification:
Saifedean did a fascinating interview with a UK doctor - check it out: Cholesterol Con w/ Malcolm Kendrick - you might be surprised that Cholesterol is just the tip of the iceberg and they touch upon quite a few currently relevant topics. This relates rather clearly to what we discussed back in July Issue 21 and the crisis of repeatability that Mattias also pointed out.
Neil asks again if you think all the sanctions and wars are worth the costs - if you do not think so then you might want to speak up and let your views be known. Mine are here with links to supporting information. It is time to get real, folks. Remember that the Mexicans did not pay for their sanctions - the American people did - that is how it works. Likewise you are and will be paying for all the current government spending - do you agree with how the government is spending your savings?
Hrvoje discusses with Geopolitical consultant and professor Ralph Schoellhammer who describes how globalism and elite policies are colliding with reality. He argues that the intellectual class are full of themselves, don’t get the recognition they think they deserve, and they lack an existential struggle due to their extreme wealth. And so they are turning against their own civilisation. Listen and form your own opinion.
A rather thoughtful keynote address - this on 6 October from Michael Saylor: Keynote Speech @ The 2022 Atlas Society Gala. He explains rather clearly his thinking process from March 2020 with reference to Ayn Rand's Atlas Shrugged (see Odolena's review). James of IA does a deep dive into Michael's address.
Stephan Livera does fascinating interviews - this one with Paolo Arduino and what is going on in Lugano Switzerland is great and an easy non-technical listen. Yes - we are still early - foundations are being built.
George explains why Next Global Financial Crisis May Be Weeks Away - is this a canary in the coal mine? My thoughts: watch out around 25 October and big things may happen around 7 or 8 November.
Denome spots many similar and related signs - indeed the SNB seems to be a leading indicator of imminent trouble. You ought to clearly see the lunacy as to how money gets created today - if you read Lyn's paper you should understand all of this quite easily.
Lunacy goes to a next level in New Zealand as Neil explains. You ought to recognise the creation of new bizarre taxes as being a clear indicator of imminent collapse - surely by now you can see who is driving all this chaos?
🤔 You likely want to give this proper consideration
In Max's latest walk and talk - among other things: watch at 2mins - DYOR but keep this in mind - it is already an extract from one year ago. Also at 5min30 he asks interesting questions about Graphene - food for thought?
Watch also at 15min - could it be possible that the EU officials have unearthed something illegal/unethical/corrupt with Phizer? Good as it is that they are asking these questions (even if answers are denied) should anything have to get out I anticipate something like when Donald Rumsfeld announced that their audit could not account for 2.3 trillion $ of Pentagon transactions at 5pm on the evening before 9-11; the next morning as fate would have it the "plane" crashed into the part of the building that contained the audit and evidence and you have never heard anything more about it.
BTW - did you already forget the plot of James Bond "No time to die?" and the nano-bot technology? Hiding in plain sight.
🤪 Finishing up on a lighter note
It is always important but potentially even more so at present to be doing what you want to do. From time to time I come across inspirational people who have taken a plunge and done something big or different and important for them.
Nathalie (only 19 when she filmed this) is an example and I do admire her clarity of vision and how well she articulates the story - click here or image below. Her determination is second to none!
In similar vein Anna is also travelling as she wishes and might even consider sailing.
Not to forget the OG in the space that is Eva zu Beck from Poland.
Yes - it did occur to me that these are all women. Perhaps that is just what the algorithm feeds me or perhaps you know that Men are from Mars and Women are from Venus - so when women have a problem or challenge they like to talk about it and that makes for more interesting viewing and insights; when men have a challenge they imagine they are supposed to get on and fix it.
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