Digital Anarchy – The Implications Of Crypto-Currencies & The Blockchain And Their Effect On Civilization

February 20, 2018
A special guest post written by Phil White (with contributions by hebgb) and re-printed with permission.

With the recent explosion in volatility, and the inevitable crash that it portends (the financial crisis of 2008 will have been a mere blip by comparison,) it is important to understand what the world of distributed ledger technologies (and, to a lesser extent, the crypto-currencies underpinning them) can offer people in terms of financial security, individual sovereignty, and improvements to the human condition. This article aims to define the terms associated with this new technology, clarify some of the misconceptions about crypto-currencies, put to rest some of the fears many have, and introduce some lesser-known applications of this largely untested, but radically different system that promises to fundamentally change the way the world functions. The teams currently working on this technology truly are trying to change the world in order to make it more inclusive, diverse, accessible, and secure. It could rightly be called ‘digital anarchy’.

If you thought the crypto space was about digital cash, you’ve missed out on 99% of what DLTs will be doing for humanity. In the comment section of a popular financial website, Zero Hedge, the user called Mr. Universe said,
“I’m starting to mine ACME coins right now. I built a farm in a cave I painted on the side of a mountain.”
Although funny, it succinctly states that which many wrongly think about the entire CC space.

When people talk about Bitcoin, what they are really talking about is much bigger than even they realize. Most people think that using the term Bitcoin describes the entire crypto-currency space, all the underlying blockchain technology, and all the applications which have arisen and will arise from this technology. This is, obviously, an overly simplistic view and is akin to saying that the term ‘concert ticket’ adequately describes every musical genre, band, and instrument, and explains how all songs are written, recorded, and sold. So let’s disambiguate.

Bitcoin (BTC) has become something of a generic term used to describe everything blockchain. It is a mistake, and one made by most mainstream reports on the topic, to refer to BTC and other crypto-currencies (CCs) as though they were the same thing. It is also a mistake to refer to the blockchain as though it applies equally to all coins. Blockchains are not singular entities, but refer instead to a structure containing within them the data and the history behind every transaction applied through their use.  It is this process through which CCs and smart-contracts establish trust, account for transactions, and secure the information of such transactions for all time. There exist many blockchains, each with distinct properties, which can operate independently or be linked together into networks of networks. Think of a blockchain as a separate intranet, linked to many other intranets, all of which are connected (but need not be) through the internet. DLTs (distributed ledger technologies) can be thought of as the multitude of different blockchains. Some DLTs, such as Hashgraph (a consensus algorithm,) which is also a DAG (directed acyclic graph), are not technically blockchains but fulfill the same role.

BTC is a digital coin as are Ethereum (ETH,) Litecoin (LTC,) Ripple (XRP,) etc. Think of them as subway tokens. If you want to ride on the BTC line and take advantage of the benefits of BTC, you will need to exchange some of your money for BTC. The same applies to all crypto-coins. Each provides a different set of services with their own individual pros and cons. The BTC train does not stop at ETH stations, and vice-versa. To take advantage of ETH’s services, you would need to trade some of your money for ETH, and the same goes for any other coin. Blockchains are not (yet) fully compatible.
The entire BTC line can be seen as the BTC blockchain, the string of transactions which have already taken place and the data they contain. It is always growing. There are many ways to build a blockchain – some trains are faster than others, some are more expensive to ride, some require more powerful engines (and use more energy,) some have tinted windows to protect privacy, some are local, some are international, and some even go to secret locations. Some lines publish their maps and allow anyone to come aboard, others are private and only show their maps to members.

In this sense, BTC is to CCs as a certain blockchain is to DLTs; it is merely one of many varieties. Pardon the semantics, but unless referring to one individual blockchain, it is a mistake to refer to ‘the blockchain’ as a single entity.

Crypto-Currencies (CCs)
CCs describe all the coins which one can purchase in order to participate in a certain decentralized application. There are currently some 1500+ coins representing at least as many projects, some of which are designed to improve a current system, some are designed to create brand new systems, some are designed to turn a profit, but all share the goal of solving a particular problem or set of problems. Contrary to popular belief, CCs were not designed to act as speculative investment vehicles. CCs can best be compared to crowd-funding for start-ups. They are usually released through ICOs (initial coin offerings – the decentralized version of IPOs,) though they need not be. CCs can be traded over exchanges such as (in no particular order) GDax, Bitfinex, Bitthumb, Huobi, Bittrex, Poloniex, Binance, Coinbase, Kraken, Cryptopia, QuadrigaCX, … like any other currency can be traded in the Forex market.

Decentralized Applications (DApps)
DApps promise to eliminate the middle-man by directly connecting users with providers over P2P (peer-to-peer) networks called the blockchain. For example, if Twitter was a DApp, tweets could not be censored because they would not rely on any one server which is controlled by a single entity. DApps and smart contracts are built on top of algorithms.

If eBay were a DApp, buyers and sellers would communicate directly without the developers charging fees, setting conditions, or refusing clients. The difference is that DLTs replace servers (by spreading computing power over multiple computers) so no third-party has any control over the transaction by controlling the servers through which they run.

If we compare a DApp like Bitcoin (BTC) to a centralized App such as PayPal, both of which were designed to facilitate payments, we see that while PayPal controls the servers through which financial transactions are made, and in so doing can control every aspect of the user’s account (holding transactions for up to eight business days, for example) and could even, through the actions of a bad actor, remove money from the account, use the account illicitly, or even close the account for arbitrary reasons, BTC, not being under the control of any one individual or group, does not allow for an intervention in any of the transactions passing through the network. This is what is meant by ‘decentralized’. (N.b. There is a possibility of compromising the network through a 34% attack, but more on this later.)

Forgive the repetitiveness of the above, but this point cannot be over-stated; the problem with the internet, its lack of security, and the ability for certain entities to control/censor large parts of it, lies in the fact that everything revolves around the use of servers. Servers are the means by which information is controlled. DLTs re-distribute the power of control and put it in the hands of the people using the system instead of those who own the servers. An excellent example of this is social media. Facebook, Twitter, YouTube… can all, rightly, control what gets published over their servers. Wouldn’t it be nice if a social media DApp were developed which could not be censored? Wouldn’t it be nice if there were no need for advertising (which doesn’t work anyways) and the spying which underpins it? (The only reason companies spy on users’ personal habits, the surveillance state not withstanding, is so that users can better be advertised to in order to pay for the infrastructure supporting the servers.) Wouldn’t it also be nice if authors owned the information they put online instead of transferring ownership to those who publish it? The very notion of free speech on the internet depends upon the ability to control the dissemination of that speech, itself. There has never been free speech on the internet. Everything can be censored. Much like if one were to visit a neighbour and act the fool in their home, the host would, and should, be able to kick that guest off of their property. Facebook is not a public space, Facebook is a private space. They can and do decide what is allowed. The government can block protests on public land because, in this case, ‘public land’ is merely a designation; the land is owned by the government. Nobody owns the blockchain.

The truth is that the world is in the process of undergoing a massive change in the way it conducts its business. It is crucially important for everyone to grasp exactly what is involved as it will surely affect the lives of everyone on Earth and change the way people look at life, business, finance, social networks, the internet, governments, elections, privacy, freedom… which are all going to have to change in a fundamental way.

Permissions, nodes, layers, shards, and APIs
Permissioned ledgers/networks are relatively simple in terms of incentives; your incentive for running a node (one of the computers that is running the system – approving transactions, storing data, etc.) is participation; if you want to play a game, you must join that game’s network, and means you need permission to run a node. Airlines could each be a node in the airline network. Musical artists could be their own nodes, or brokers could run their nodes for them. Why not buy concert tickets from the artist directly? On public networks (non-permissioned ledgers,) the incentives are much more complex, and will not be discussed here.

One can think of networked communications as comprised of a series of layers. There can be a crypto currency layer, a consensus layer, a security layer, a data layer, etc., and all of these are built upon each other. They can be described as an algorithm sandwich. Every layer slows down the system, introduces additional points for bugs to creep in, and increases the complexity of communication between the layers. Speed, throughput (the amount of information being processed within a system in a given amount of time,) security, and fairness must be maintained throughout all the layers despite constant additions. The pieces of the layers cannot be thought of individually, they must be addressed holistically.

Systems that use many shards (the partitioning of databases into smaller parts) need to be fast, but systems that need to operate on only one shard need fast shards. Shards are like processors in your computer; some programs need many, some need only one. Some applications/programs will not be any better if there are many shards. Some need the multiple shards to run more efficiently. This is largely relative to the size of the network. Shards can be looked at as bricks. Even if the security of one shard is good, how will the security be affected when putting these shards together? Strong bricks can build weak walls or strong walls, whereas weak bricks can only build weak walls. Shards are being built to be modular so that if a better brick is developed, it can be inserted into the wall at a later date.

An application programming interface (API) is, in basic terms, a way for different components of a program to communicate together.

Common Myths About CCs
There are many false notions about CCs which are being put forth by otherwise well-educated and well-intentioned individuals and organizations. Several economists, bankers, traders, politicians, and others have been arguing against the advent of CCs. The arguments they raise against the use of blockchain as it pertains to money are well known but are usually not very accurate and can be very biased. The following are a selection of common myths, misconceptions, and arguments which are, at best, weak.

No backing, no intrinsic value
It has been said that CCs do not represent anything of value, are not backed by anything of value, and consist of nothing more than ones and zeros on a computer screen. There are many problems with this statement.
There are some CCs which are backed by various physical goods such as gold or oil. They are not the first. The US dollar was backed by physical gold until 1973 and the country of Tatarstan still backs its currency with both wheat and oil. It may be the only country left in the world which does not use fiat currency.

tatarstan_coins

OneGramCoins (OGC) are each backed by one gram of physical gold and became the world’s first gold-backed digital coin. Venezuela has released the Petro (Petromoneda – PTR) crypto-coin which is backed by over five billion barrels of oil currently held in reserves. These are but two examples of how certain coins are being backed by physical commodities and they are not alone. This being said, they are certainly the exception rather than the rule. Most coins are backed, not by goods, but by services. Owning these coins allow the users access to services which would otherwise not be possible. Some claim that this is not a backing, but in reality, it is simply a different form of backing. A similar and related point brought against CCs is that they have no intrinsic value. Some would argue that neither does fiat currency, nor any of the other multitude of goods which have been used as currency throughout the ages such as: seashells; tally sticks; beads; modern nickel and copper coins; etc. The problem with this is that even precious goods, once they fall out of favour for whatever reason, also lose their intrinsic value. (Silver lost much of its value with the advent of digital photography.) The value of CCs is what they allow the holder to do with them. Access to computational power, for example, is certainly of value to mathematicians seeking to discover new prime numbers. Access to micro-loans is a very valuable service to those in emerging market economies seeking to improve the quality of their lives. Examples of intrinsic value are endless. Some who defend CCs have stated that it is the underlying technology which gives coins their value, but this is not accurate. The tech itself is mostly public and of little value. The way a certain team of individuals applies the technology gives the project, and therefore, the coin, value.

CCs are nothing but scams, fads, and Ponzi schemes
There are currently over 1500 CCs which comprise companies, staff, budgets, and goals. It is beyond credulity to insinuate that all these hundreds of thousands of people are all in on a scheme to defraud the rest of the population. Certainly, some coins, ICOs, and blockchain projects are merely scams (or even jokes) and several have been proven to be schemes to defraud investors. These represent a very small percentage of the overall market, and the same can be said of any asset class. Buyer beware. But it is nothing more than a paranoid delusion to imply that all coin projects, or even a majority thereof, are scams. Many, maybe even most of the coins on offer today will end up being worthless, but so will the majority of shares in small companies. Early adopters often suffer the greatest losses or the greatest gains. But early adoption helps the industry develop and grow, which is what fuels a rise in value in the first place. Traditional markets can also be compared to Ponzi schemes considering the boom-bust cycle and the bank bail-outs and bail-ins which fuel it.
CCs are not like break-dancing, and they will not go away.

CCs are in a bubble – tulips
When one looks at the market for CCs of late, it would be easy to think that it is in a bubble. BTC is often compared to tulips, hearkening back to the Dutch tulip mania which collapsed in 1637. The only problem with this analogy is that BTC has been there before, losing over a third of its value many times in the past, only to rebound and come back stronger than ever. This, of course, is not to say that it will continue to do this forever. BTC could very well go to zero one day, but calling it a bubble every time it goes up in value is disingenuous and disregards its almost ten year history. Whether or not BTC is in bubble territory is not so important. With the recent growth in the space, even if BTC were to suffer a catastrophic loss of value, there would be many other coins ready to take its place. Saying that the entire CC market is in a bubble is also misguided considering that the tech bubble burst when values were at the $7T level. The entire CC space now sits at about $500B. It is the author’s personal belief that the market is in its infancy and that the total value of CCs will only rise to eclipse the value of every asset class in history. Many have said that CCs will give rise to the world’s first (official) trillionaire. CCs may one day be in a bubble, but for the moment, the bubble has only just begun to inflate. It is more like a blister on the financial world’s heel.
There are just over 1400 people, private individuals in the US alone, not counting corporations, banks, hedge funds, etc., who make $60M per year.
Globally, there are about 1800 crypto wallets worth over $10M.
Do you still think it’s a bubble?

Traditional market analysis
This leads us to look at the metrics used to evaluate traditional markets. There are no comparisons possible between the usual tools and CC analysis. This becomes quite obvious when looking at CC charts. Certain patterns tend to emerge which are not seen in the lower volatility regime of stocks and bonds et al. Using these methods to glean a forecast of crypto-performance is akin to measuring a bottle’s volume with a sextant or the distance to the nearest star with a bathroom scale. Many traditional tools are more than useless even in the domain for which they are intended, but trying to find a place for them in the CC market is simply wrong-headed.

CCs are speculative investment vehicles
CCs were not meant nor were they designed to be used as speculative investment vehicles. The fact that many have made fortunes trading CCs is secondary to their true purpose. CCs can be seen in much the same way as crowd-funding resources or even municipal bonds. They are simply a  way in which capital can be raised in order to support an underlying project. They could more accurately be called digital start-up capital. Anything which lives in a highly volatile milieu can be traded for enormous gains or losses, but without the underlying goals, the coins themselves have no meaning. The coins have become as a proxy; rather than buying stocks or investing in IPOs (sometimes also backed by ideas and intrinsically worthless,) the coins serve as the assets traded and represent an investment in the idea, in the team, or both.

CCs can be hacked
This is a common misconception. There is much conflation between the coins, their companies, and the exchanges which allow for their trading. No crypto coin, including BTC has ever been hacked. Blockchains and distributed ledgers do not get hacked. On the other hand, many exchanges have been hacked. The irony is that if the internet had been secured using a DLT security layer, hacking exchanges would be orders of magnitude more difficult. Many CCs have also been lost or stolen, but this is a different matter altogether. Lots of money is either lost or stolen every year, as well.

No electricity, no CC
A common argument against CCs is that access to them is removed during a power failure. While this is mostly true, it is no different than with fiat money. Credit cards, debit cards, ATMs, and even bank employees do not work during power outages. Unless one has cash on hand, which CCs do not preclude, access to money is always in short supply during blackouts. Paper wallets can be traded like IOUs or stock certificates during power outages. Digital wallets run on batteries, and can be used to transfer coins.

Production (electricity) costs are prohibitive
While this has been true for some coins using the proof-of-work algorithm (PoW,) the same cannot be said of newer coins which use proof-of-stake (PoS) algorithm, amongst others. There are many algorithms in use today including proof-of-stake-velocity (PoSV,) proof-of-importance (PoI,) proof-of-capacity (PoC, includes varieties called proof-of-storage and proof-of-replication,) proof-of-burn (PoB,) proof-of-asset (PoA,) and proof-of-run (PoR). While the cost of ‘mining’ can be high, it need not be. [Explanations of these algorithms is beyond the scope of this article, but a simple explanation can be found here.]

Network fees are prohibitive
This is also true for certain coins, but many coins can be traded with no, or very low fees. Let’s not forget that credit card companies charge 3-4% on every transaction. This is temporary and all coins will soon cost nearly nothing to use.

Network transactions/clearing take(s) a long time
While some coins can take a matter of hours to clear, the majority of coins clear almost instantly. This depends on throughput. Bank wires take several days to clear. PayPal can hold funds for up to eight business days. Western Union, while quicker, charges enormous fees. This argument is obsolete.

Internet shut-downs would kill CCs
It can be argued that CCs rely on the internet to be of any use. There is some truth to this, but it is not completely true. CCs can be exchanged through local wallet to wallet transactions, paper wallets can be printed and traded like IOUs,  and intranets based on local servers can be used to transfer funds. These transactions will not be recorded on their blockchains (until updated) and the security measures inherent in the system to guard against things such as double-spending would, obviously, not be in place. Nevertheless, the internet was designed to be redundant, and a major persistent shut-down has never occurred. National shut-downs have occurred and are a threat to those living in such a place. The natural option here is to re-locate, but that option is not open to everybody. It should be noted that governments, while they do hold the power to shut down the internet in their own respective countries, can not shut it down on a world-wide scale. It should also be noted that if the government wants to, it can use regulation to limit the use of CCs, so why shut down the web? Governments can and have confiscated all manner of things from blankets to gold and could confiscate CCs, as well. Whether or not they would succeed is another story. The irony is that the use of DLTs will make governments more responsive to the people (if they control their own money) rather than the banks (that do so now.) DLTs can also make governments more transparent and can even eliminate corruption by making elections open and secure, making all government accounting public information, and limit fraud, over-spending, and black budgets by governments that hide tax-payer money for illicit purposes, which they all currently do, without exception. Using a blockchain to account for government finances would immediately expose black budgets. (If total expenditures are greater than revenue plus debt, where does the extra money come from?)

Elites control the price of CCs
As in any market, it is the whales who get their way; this is not common only to CCs. Large holders of any asset, be they institutional or private, can manipulate price, volume, and demand to a large extent. Current manipulations can be seen in the gold market among others, algo-driven trading determines prices across almost all markets, futures trading affects price, as does government regulation. This is no different than the current fiat regime. The difference is that with CCs, people will come to control much more than any billionaire or corporate entity could afford to buy. Once the threshold of control passes into the hands of the public and the ratio of ownership changes, these shenanigans will be much more difficult to rig. This is a temporary problem.

CCs will usher in a one-world government
This is quite a claim, but the argument is not a new one. It is without doubt that there has been a move towards digital currencies. These, however are not the same as CCs. Digital currencies are simply fiat money but without the cash. It is the elimination of cash which has led to reports of global governance, which is a real phenomenon, but one which does not rely on CCs. Hence the conflation. As it happens, the only way to subvert any actions governments might take to consolidate their power over the populace is through the advent of personal and financial sovereignty. Only DLTs are currently positioned to offer a path in that direction.

If McAfee eats his manhood, cryptos are dead
Much has been made of the wager offered up by one of the gurus of CCs and DLT technology. If indeed BTC does not attain the heights to which John McAfee claims, it only speaks to BTC’s failures as a viable technology. While the CC markets seem to be closely correlated to BTC’s price, many coins are expected to fall by the wayside as the technology progresses. BTC has many problems which can better be addressed by other DLTs. The movie industry didn’t die when VHS was replaced with DVDs. The same can be said of this non-argument.

CCs are not money
Well, here again we get into semantics. There are many definitions of money. Here’s what money is, to most people: Money is that which one gets for one’s labour, and that which one trades for goods and services required. For most people, CCs can just as easily be money as can coins and bills, or silver and gold, or seashells and beads. CCs have an advantage though; they can be sent instantly anywhere in the world. In many parts of the world, CCs have been accepted as methods of payment for everything from homes to bullion to clothing and to lunch.

There are two arguments for CCs relating to money which are rarely, if ever, brought up. The first is that because of their limited supply, they are invulnerable to hyper-inflation unlike the currency of certain nations: Argentina; Venezuela; Germany; and Zimbabwe, to name a few. This is not to say that they cannot lose value if they become obsolete, only that the money supply is inalterable. It is control of the money supply, the amount of money circulating through the economy, which most influences its value.
The second is more down-to-Earth. Currently, most of the children under twelve who have any experience on the internet have used some form of CC or token. It is the only knowledge most of them have regarding the wide world of finance. They have been earning tokens from any number of online video games and exchanging them for upgrades to their characters or for the purchase of useful equipment. As far as the economy goes, besides the fifty-dollar bill grandma’ puts in their Christmas card every year, it is the only experience these children have with money, and they use it almost every day. These children have no trust issues with CCs, are very comfortable trading them, and are growing up rather quickly. They are the future, and the world will belong to them. It is only natural that they apply that which they know best to the world they will have a hand in creating.

What are some of the problems we face, and what are the solutions DLTs offer?
DLTs came about, not by chance, but for a reason. Their purpose has simply been to solve problems. CCs can help fund teams of thinkers and dreamers who wish to tackle some of the world’s most pressing issues. The following are just some of the more pertinent problems the world has yet to solve, but as we have left it to governments and NGOs to do these things for us, and as their mandates have largely been ignored or have failed, it is time we take back the power for ourselves in order to effect change on our shared planet. Problems like corruption, sovereignty, freedom, poverty, and war have been put aside in lieu of more important issues, or so say the international institutions we relied upon to fix them, and have instead been replaced by measures like austerity, increased surveillance, immigration, political correctness, terrorism, and one-world government. How much longer were we supposed to wait?

Most of these ‘solutions’ are not panaceas, rather, they offer the opportunity for those who suffer from these problems to bring about their own solutions. Whether it is by crypto-anarchists who want to free themselves of all forms of governmental control, or by the financial industry (first-adopters) who want more freedom to profit from within the current regulatory framework, or by workers in emerging markets who want more control over their financial lives, the issue of sovereignty has always played a major role in the development of DLTs. Sovereignty is the basis for many of the projects which have been launched in this space, and it comes in many forms.

Micro-loans have become very popular in less developed markets. This industry has made many people rich and even more have been made richer than they were. There are many ways to implement micro-loans over DLTs, but the important part to take from this is that no third party is needed. Instead of one wealthy person serving as banker to the poor, there is no reason why anyone cannot become a lender of small amounts of money half-way around the globe. Certain CCs are making this easy and are reducing the cost of borrowing money for people everywhere. Why should the rich get to borrow large sums for free (at 0% interest, or close to it) when the poor are charged significantly more? By removing the middle-man, fees can be eliminated altogether and interest can either be waived by philanthropic individuals or be brought down to levels comparable to those which large borrowers currently pay. In the same vein, people who choose to sell goods to others over peer-to-peer (P2P) networks can eliminate the fees charged by auction sites like eBay, as well as all the associated costs of currency conversion and transaction fees from payment processors like PayPal, not to mention that the transactions would be instantaneous. Even if paid upon reception, a linked sidechain could be appended to the blockchain in order to track a parcel sent through the mail.

Banks running dark pools want secure data storage and encrypted communication between nodes. They want to share information but don’t trust each other. Banks in dark pools have to trust one bank that runs the servers. Controlling a server gives an advantage to those who control it. There are no privileged parties in the blockchain.
Banks, credit unions, credit card companies, insurance companies, investment brokers… the entire financial services industry could save lots of money on security. Instead of protecting one server, the cost of securing the network would be evenly distributed amongst all the participants. Early adopters of the tech were the crypto-anarchists and the financial industries.
By this point, some of you might be thinking that there would be no need for banks at all. That might very well be true for personal banking needs, but institutional needs are a different matter. Financial industries are leading the charge; banks and insurance companies want speed and security and fairness, believe it or not, but just amongst themselves and not necessarily for the greater good. The entire insurance industry has already adopted Hashgraph (currently the fastest and most secure DLT) as their new standard.
This is not to say that the reduced presence of banks in the lives of people would not be greeted with enthusiasm, as it certainly would. Nobody would argue that banks don’t make enough money, with the possible exception of bankers. Perhaps their role in the world could be lessened while the people enjoy more of their money and the freedom that comes with financial sovereignty.

Employers who paid their staff with CCs and through DLTs would not incur fees, nor would anyone ever need to be charged for cashing a cheque. And since all payments could be made through smart contracts, the payroll and tax accounting could be taken care of automatically further reducing costs for business owners.

An insecure internet
Who hasn’t been exposed to spam? Many have also been victims of phone spoofing. (The telephone network, built long ago, is also very vulnerable and insecure.) Distributed denial of service attacks ( DDoSs) can easily take down websites through their use of bot-nets. Hacking, through code insertions (popular amongst websites which use Flash,) distribution of viruses, trojans, worms, etc., affect us all, at some time. ‘Game theory’ attacks can affect international financial systems as has been the case with recent attacks on the SWIFT system. Firewall attacks are also common.

The current internet of things (IOT) is both fragile and vulnerable and introduces many more potential bots in the form of dishwashers, printers, webcams… which are susceptible to being taken over by malicious forces using bot-nets for DDoS attacks and other nefarious purposes.

DLTs can be built in a layer on top of the internet in order to add security and overcome the flaws inherent in the network. Changes are very difficult to implement into the current underlying technology of the internet. Adding a secure layer on top of the internet provides an excellent way to make these changes quickly and to make them scalable. Serious security protocol vulnerabilities, which persist for years and are sometimes not noticed until they are exploited, can be eliminated. A trust layer (verification) would solve spam if everyone were to send mail through trusted and decentralized networks. Hackers would find that their methods of stealing information and vandalizing systems would be greatly limited. (It should be noted that all software is inherently vulnerable to hacking. If it can be programmed, it can be hacked. DLTs would mitigate the risks and bring the probabilities of successful attacks down to insignificance. More importantly, DLTs would instantly inform all the users on a network that a hack had taken place thus making it much easier to limit its spread and greatly reduce its effects.)

Firewall attacks refer to the 34% rule, as mentioned above. If a malicious actor or group of actors can control 34% of the computers running a network, the entire network can be compromised. This is true for all systems. It is very unlikely that any group could ever come to control 34% of all the computers (or nodes) on a network, but the problem today is that entire networks can be compromised through the control of only one computer. This is the very worst possible scenario, and is the paradigm which the internet finds itself under today. It is one which currently costs businesses untold billions in internet security. These costs could be eliminated, or greatly reduced, through the immediate implementation of DLT technology.

If security and privacy were not necessary, then we could just use a server, but if security slows down the process too much, it wouldn’t be accepted. The answer is not to scale down security, rather to build a better system where the security does not hinder throughput. Systems need to take considerations of speed into account. A faster system is a better system (and in many cases a more secure one,) and processes inherent in some DLTs are faster than anything currently available.

Another aspect to security is that the incentives to act in good faith (good faith would not even need to be a consideration with strong verification) are vastly outweighed by the incentives to game the current system for bribes, coercion, and financial or political gain. When billions of dollars are at stake, the threat of fines or a short stint in a minimum security facility is no deterrent. DLTs can, and do, offer better incentives for all involved to act correctly. If everyone used strong locks, thievery might be eliminated. In the same way, if everyone used strong networks, negative actions would not be worth the trouble. (Better enforcement of current regulations would also help, but that is another story, altogether.)

Peripheral costs and benefits
There has been much focus on the fact that the current system the internet is built around is having enormous and detrimental effects on people using social media, especially on the youth. It has been said that we are now all ‘alone together’. Culture has changed overnight and on a massive scale. Ironically, online social interactions are hurting social skills amongst the youth. Loneliness and depression increase with ‘smart’ phone use. Fewer distractions could lead to a greater attention span and more efficient cognitive processes. Technology has already altered our consciousness and our culture.

Servers carry much of the blame for this problem, as well. The current state of internet technology and the way it is implemented hinders true communities from forming. Instead, people interact, not within groups, but one-on-one within a group. DLTs could change the very nature of group interaction by making it possible to create virtual worlds (everyone would have the power to create their own virtual universe without necessarily exerting control over the group.) Leemon Baird calls these ‘shared worlds’.

With shared worlds, one wouldn’t have to pay for access, there would be no limit to membership, anything would be possible, interactions would be group-based and not just one-on-one times a hundred, the structure could be democratic or tyrannical, and the market would decide which it preferred. Users could even vote on the direction the world took. They would put Civilization, Sims, and all the other ‘Tycoon’ games to shame.

Liberals and conservatives could go their own way and isolate themselves or learn to live together and play nice with everyone. Don’t want to deal with hate-speech? Make your own rules. Want to encourage free speech? The same applies.
This is the elimination of cultural borders within state borders. It is also the implementations of borders within state borders. In a phrase, it is the advancement of total freedom to associate.

Different shared worlds could connect to each other. Imagine starting one’s own stock market or video game as easily as typing a letter. A certain world could issue/manage a CC which could be used by several shared worlds. Data storage, game environments (like Minecraft,) alert systems,… all could be created without paying for hosting services, and changes made to one world would instantly propagate throughout all these connected worlds.

Thus everyone could interact as though they were in a group instead of interacting with others one-at-a-time. Advances in virtual reality (VR) would help. This would have positive effects on the psychology of those who partake in social media. Not to mention, instead of being alone together, kids could hang out and truly be together. For example, instead of a ‘zombie’ user walking into a lamp-post, those in the group could warn that user that a lamp-post was in their way. This is a very basic example, but the possibility of increasing the group dynamic within the social media space, depending on the level of VR technology available, is unlimited. Whatever way this develops, it is important, and is becoming more and more urgent, that we build a society based on benevolence, compassion, and teamwork instead of greed.

The culture of the developers, and of the entire blockchain revolution, is central to this new paradigm. Cultural issues affect the technology being developed, how the technology is to be implemented, and how the technology influences the world’s culture as a whole.

Griefing (vandalizing digital property/assets) can be eliminated through the implementation of DLTs. Much can be gleaned about property rights through this one simple example.

Systems for such things as distributed computing and data storage could be made much more effective and secure thus enabling large-scale projects (some of which already exist) to more efficiently use the resources of the entire network as though it were one machine. Networks could be turned into super-computers more powerful than any in existence, and that would make it possible to make use of unused, and currently wasted, computing resources. (The advent of AI is a different thing, but despite its dangers, that discussion is beyond the scope of this article.) This would indirectly allow those whose electricity costs are high to take advantage of lower energy costs elsewhere in the world. This, in turn, would incentivize governments, not only to reduce the costs of energy, but to find and adopt better methods to generate power. Technologies which threaten the profitability of dangerous industries (such as nuclear power generation) would be made available to the public. Nikolai Tesla might finally get his wish. Technologies such as water-based engines, LFTR – thorium reactors, hydrogen fuel cells, etc., the patents for which have been bought by private corporations and locked away in a safe, could now be brought out to the benefit of all. Free energy has been proposed by many people, and whether these technologies can be proven to work or not, at least their potential can now be examined openly. The incentive to hide beneficial technology from the public in lieu of higher profits can be done away with.

Thomas Rau has some interesting insights into some of the potential applications of DLTs. He envisions a ‘material passports’ which could be implemented in order to re-use all the raw materials that go into building all the products in existence.

Protect your information/privacy while sharing it
This might sound like an impossibility, and under the current system, it might well be, but through the use of DLTs, this can become the new standard for information access. Take the case of a driver’s license, as an example. If some entity needs to see your driver’s license in order to get some information about you, why would you want them to see your street address and/or any other information contained within the document which is not relevant to the matter at hand? DLTs can limit exactly what information is to be shared with concerned parties. The validity of your license can be verified independently of any associated information, and can even be done anonymously. The license itself can be verified without the identity of the user being divulged. This would be beneficial to a great number of things such as medical records, voting records, tax information, property ownership… and the list goes on.

Using this method could make governments transparent and accountable while, at the same time, protecting sensitive information such as state secrets which impact national security. I do not believe that governments want to stifle this technology, rather, they want to prevent the public from using it against them. Results of FISC (FISA court) procedures could be made public while protecting the underlying classified information. Immigration documents, passports, social insurance cards, gun registration documents… could all be better managed using this system. Imagine the implications.

Also, and perhaps even more importantly, the revocation of a document would be shown across the network instantly. This would relegate forged documents to the dustbin of history. Indeed, some of the best applications for DLTs, as far as governments and banks are concerned, is the eradication of counterfeiting. This was the main focus of the Chinese (and others’) government’s investigations into DLT technology at the outset. Serial numbers on fiat currency (being a centralized use) once put on the blockchain (decentralized information) could indicate counterfeit bills at point-of-sale locations everywhere. The same technology could be applied to all manner of documents. Even proprietary software applications which are offered on a trial basis could be monitored more easily. Software piracy would become a thing of the past.

Even the gold industry has started integrating blockchain-based gold trading which could lead to a re-emergence of the gold standard replacing fiat currencies the world over. This is just speculation, for the moment, but who knows where this could lead?

Education and ownership
Education, as it exists now, is a costly endeavour and is limited to a certain strata of the population. Student debt is currently a huge hindrance to those just getting started in life. DLTs could make all educational materials available to all people, all across the world, and at no cost to the users, all the while protecting the rights of those who contributed/authored course materials. Imagine what could be accomplished if the sum of all human knowledge were available to anyone who wanted it. The potential genius of those without access to information could be unlocked and put to the best use society would have for it. How many potential Nobel laureates have gone unnoticed? How many stupendous innovations have been lost to class divisions or geographical chance?

This could change the way the world thinks about intellectual property, patents, copyrights, and the notion of ownership itself, while ushering in a world of co-operation instead of the current paradigm of competition. Some might claim communistic overtones, which is by no means the intent here. What this really portends is the advent of a purer form of capitalism. Whether this leads to an abandonment of banks (or even money per se,) will be decided by the market, and by the people themselves. Further, what this actually indicates is the possibility that many contradictory paradigms can co-exist instead of necessarily leading to animosity, hatred, or war.

Groups could start working together, not only to come up with solutions, but to fine-tune those solutions and come up with others, and by comparing them, come up with the best solutions instead of the most profitable ones over the near-term. This really changes the focus from short-term profits for a few to long-term benefits for all.

People might start making movies based on merit rather than box-office expectations. News media might even take-up proper journalistic standards instead of chasing ratings. Although this may be a premature argument to make, it does lead one to think about the truly awesome possibilities DLTs present. It is sure to raise interesting questions and spark debate over fundamental issues the world has, so far, taken for granted.

Take-aways
Some of the things which are central to the adoption of DLTs include: security; trust/verifiability; speed; throughput (expressed in transactions per second;) consensus; fragility; scalability; redundancy; invisibility (working in the background;) privacy (sovereign identity;) latency (timing;) revocation; transparency (banking, government;) and sharding.
While a very few of these attributes are applicable to current technology, only DLTs offer the possibility of integrating all of these benefits into the goods and services we all use everyday.

It is also important to understand that there are many issues which need to be addressed and resolved before this technology is adopted on a larger scale. Some of these issues include technical implementation, social considerations, political implications, organizational hierarchies, regulatory systems, and the legal aspects underlying all of the above. There are also some philosophical questions (which were touched upon above) left to consider. The main issue (and one which could be facilitated by the very technology in question) is that whatever course we, as a united human organism choose to take, that course will be decided upon freely instead of being foisted upon us by some outside force with a vested interest in retaining the status quo.

This is just the tip of the proverbial iceberg. The possibilities are truly endless, and the technology is very much still in its infancy.




*Update*
Russia is in the process of implementing Ethereum-based blockchain technology in order to secure its election systems and guarantee fair elections. Seems like a strange thing to do if Putin really was the tyrannical dictator that the west makes him out to be. How ironic that while the USA is mired in election tampering (this is only one of hundreds of articles showing voter fraud and election tampering which is so very prevalent all across America,) as well as a sideshow to implicate Russia for it, the Russians are becoming the paragon for democratic processes.
Read more about it here.

The revolution has begun.




Although many different coins, technologies, applications, and people were mentioned by name in this article, I do not specifically endorse any in particular. This article should not be taken as investment advice. The reader is encouraged to do their own research on this and on any topic.

Contact the author through this blog here.
Thank you for your time and attention to this crucially important matter.

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On Hegel, Commies, Fascists, Terror, Liberty, Bigotry, The Left-Right Paradigm, Globalists, Populists, And TPTB* Who Brought It All To Us In Order To Take Over The World

It’s working, and why wouldn’t it? It always has.

I often wonder how it is that liberty-minded people end up supporting fascists. It’s not so hard to see, really; when presented with two choices, people have to pick, even if neither choice is optimal. This notion is the key to understanding the world as it is.

This notion is not foreign to many of us. Many governments and their elections are based on this system. It is often said that a bird needs both its wings to fly, both the left-wing, and the right-wing. Divide and conquer is the applicable cliché here. If you dislike both the liberal and the conservative candidate, what is there left for you to do but stay home? Doing that, while symbolically relevant, will not change the outcome – an outcome which will determine the course of your life despite your lack of participation in it. After all, even if only ten percent of eligible voters vote, winning six percent of the nation’s voices is enough to rule them all. That’s democracy; well not really, but that’s what democracy has come to represent to most of us these days.

Taken to another level, this dichotomy can be implemented towards much more nefarious objectives.

Take the Bolsheviks, for example. They overthrew the ruling elite, killed the Czar and his family, and decided they would share the wealth. (In reality, it didn’t have the desired effect, but I’m trying to keep this article under a million words.) What’s important here is the spirit in which the revolution was undertaken: taking the power out of the hands of the elite, and dropping it into the laps of the people. They did not know what to do with this power, and so were subverted, but we are more sophisticated than they were; or at least, we have a chance to be.

World War II and the construct of Nazism, which was almost entirely an Anglo-American creation, had at their roots many causes, but had only one aim, to stem the tide of Communism. The ruling elite did not want to see the revolutionary mind-set grow and spill over into their own countries, lest they receive the same treatment as the Czar.

[More specifically, there was open support and admiration for Hitler himself (despite the fact that National Socialist party was a party for the workers, and one which promised revolution – most knew this to be a political ploy) from such notable individuals and families as: Lord Randolph Hearst; Prescott Bush (son of the original merchant of death, Remington’s Samuel Bush, and father of George HW Bush #41, and grandfather to George W Bush #43;) the Harrimans; the Dulles’; JP Morgan; JD Rockefeller; WA Harriman; the Carnegies; the Rothschilds; the entire British royal family; and on, and on, and on, and on, and on.

coke-nazis-640x657

The list of large American businesses which dealt openly with Nazi Germany is long and staggering and includes: MGM; Coca-Cola; GM; IBM; AT&T; Nestle; Ford; Pratt and Whitney; Douglas; Bendix Corp.; Woolworth; Dow; Du Pont; Union Carbide; Westinghouse; General Electric; Gilette; Goodrich; Alcoa; Singer; Eastman Kodak; ITT; Standard Oil; Sullivan & Cromwell; Dillon Read & Co.; Chase Bank; Union Bank of New York… etc – more details here. Not to mention the large number of British, Swedish, and Swiss companies and banks which did the same.]

Therein, we have the foundation of the dichotomy which is still in play to this day, namely communism vs. fascism.

Now, one would be hard-pressed to find very many people in America (or in most of the Anglo-world) who would openly claim to be either communists or fascists, but that has not always been the case. Both movements, at certain times, had found large numbers of Americans in support. (Ironically, both the left and right movements accuse each other of fascism.)

Given the choice, and knowing what you now know about the roots of communism (don’t forget that Karl Marx was German,) would you choose to be a fascist or a commie?

There is currently a movement in the United States for the protection of constitutional rights which have been whittled down by both the Bush and Obama administrations since 9/11 and the passing of the so-called Patriot Act. The right of free speech, the right to bear arms and many other tenets of the constitution are seemingly under attack by proponents of the security state and the far-left. The people fighting to keep these rights have been labelled as the alt-right movement, or extreme conservatives. For the most part, they believe that the US is and should remain a republic instead of being a representational democracy. Many take offense at the term ‘democracy’ as it is applied to their country, as I myself learned the hard way. These people are certainly not commies in the true or the traditional sense, and they consider that an offensive term as well. Neither do they consider themselves fascists, even if others tend to label them as such, for some strange and incomprehensible reason.

Since the fall of the Soviet Union, one would be hard-pressed, outside of China, to find very many communists left. There are certainly a great deal of fascists, and Europe is considered by most to be socialistic, but the communist bogey-man has faded into the night, as it were. New terminology had to be devised, since people cannot be expected to contribute tax money to a military industry if there is nothing to defend against. Hence was the threat of terrorism born. But terrorists were not a big threat to the western world, despite demonstrations like 9/11, as lightning and five-year olds were statistically both responsible for more death and mayhem than were terrorists. More terror was needed to fuel the consumption of military-grade weapons systems by local governments to be used against their own citizens in order to keep them safe. Borders needed loosening and immigration needed to be accelerated, but not because people fleeing war zones such as Syria and Libya are terrorists, but because terrorists needed to be inserted into this population of migrants. Hence terrorism by Muslims and Sharia law could be the reason behind all the surveillance state’s new toys. [Cyber warfare is also closely related and should be quickly mentioned, but it deserves its own separate article.]

wOp1Nn1

In come the squirrels. Many issues have been raised which further divide the globs from the pops, and it seems that the most prevalent is that of religious bigotry and racism. Nothing seems to divide as well as do race and religion. Nothing seems to distract as well, either. If TPTB could use race and religion as effectively as they have used communism and fascism in the past, this globalism thing would be a cake-walk. Bush #41 started to set this up in a speech he gave on March 6th, 2001, a speech largely dedicated to promoting the success of Operation Desert Storm.

But there was inevitably going to be resistance, resistance to the influx of immigrants in these difficult economic times, to the build-up of civilian police force armaments, and to modern surveillance tactics. This resistance had to be countered, and so a new Hegelian concept needed to be introduced.

The new terms-du-jour which have emerged are globalists and populists. It is the populists who have taken up the ancient role of the communists, as the new threat to global stability, and are seen as ‘the last great problem,’ at least as far as the globalists are concerned. The globalists, of course, are the new fascists. They deny this association of course, but as we say, “If the shoe fits…” Populists fight for national sovereignty while globalists fight for a global UN parliament and a new world order (a term first used by Bush #41 ten years to the day before 9/11,) which Barack Obama referred to as an international order. Obama, Bush #43, Clinton, Bush #41, Reagan, and Carter are all globalists, and Trump is a populist. The UNPA (about which I have written much) is pushing for a global parliament to be run by non-elected political representatives and NGOs in order to better represent the voice of the people at the UN. This is disingenuous, at best. The claim is that since ordinary people have no voice at the UN in its present configuration, the people should be represented by lobbyists and corporations. This claim, despite already having been implemented in the European parliament,  is both laughable and transparent.

So where am I going with this? Well, considering that the world has, since WWII at least, been mostly split between communists and fascists (democracies being a weak compromise between the two,) and given that the new paradigm is Christianity vs. Islam, we need to take a step back and gain some perspective on this. Muslims are not the enemy, Iran or North Korea are not the enemy, Russia is most certainly not the enemy, nor is China, the left and the right are not enemies, and populists are not only not the enemy, but are the only ones who have even a slight chance of standing against the true enemy. The enemy is the same as it ever was. The enemy of liberty, the enemy of sovereignty, the enemy of financial independence is and has always been TPTB. Tyranny, plain and simple. And as long as they have us fighting each other, they can quietly go about their business, as they always have, to take it all for themselves.

When we are successful, and we will be, we have a real chance at this new world order; an order in which a credible United Nations can use its peace-keeping role to fulfill the promise and vision of the UN’s founders.

-George H.W. Bush #41

n.b. The founders of the UN just happened to be those who ‘rid’ the world of fascism: FDR, Winston Churchill, and Stalin. Fascism did not go away. The fascists won WWII, and went underground. Fascism took over Europe from Brussels. Fascism is more rampant now than it has ever been.


*TPTB = The Powers That Be

Benji’s Plight

In 1971, the French sent a gunboat to New York harbour to get their gold back because the USA was over-extending itself as per the Bretton-Woods agreement. It was President Nixon who was not playing by the rules. In this example, it was the Vietnam war which was being funded but without enough gold to back the expenditures. The US was inflating its own currency. Since the Franc was pegged to the dollar and the dollar was pegged to the gold that America held, there wasn’t enough gold to maintain the value of the French currency. This is why the French acted. This was essentially the beginning of what we now know as central bank money, or modern fiat money.

Why mention all this? Well it seems to me that the Chinese are de-evolving in monetary terms, going back to a Bretton-Woods type system in order that they can play the role that the US played but with their allies, instead. For that to happen, they need to back their currency with gold, and so they will need as much as they can get. Russia has also spoken about a gold-backed ruble.

Gaddafi was in the process of creating a gold-backed pan-African currency, but Libya did not have the clout to withstand the American onslaught, and we all know what happened after that. China does.

If we exclude QEII, the largest land-owners in the world are Russia, China, the King of Saud, the King of Thailand, the King of Morocco, and the King of Oman. All of these countries have large Muslim populations; even Russia is about 15% Muslim. All of them have been involved with some form of gold-backed currency, or are currently talking about implementing one. China is going to do it for them, and unite Asia in the process.

This is why Kazakh president Nursultan Nazarbayev said, at the UN, that the IMF must go and that the world reserve currency should no longer be dollars. He also said that the UN should be based in Asia. Kazakhstan is hugely rich in natural resources (oil, gold, uranium…) He gave this speech on the same day as Obama and Putin spoke, but nobody was listening.

This, in my opinion, is what we are seeing in China now. They are slowly trying to shed dollars without causing too much commotion. If they do it too quickly, they would lose a great deal of value in the process. Eventually, though, the dollar will be dumped. China did just get into the IMF’s basket, for credibility and support if nothing else, but this may be short-lived and not for the reasons most would think.

With Turkey looking east, they could collectively control all the oil and gas flowing into Europe (Turkish Stream pipeline,) and most of the water flowing into the middle-east. The east would have Europe by the short-and-curlies.

This is also why they want to ‘easternize’ Europe with a large influx of migrants. Terror is a serious issue for all these actors, not just an excuse for expansion like it is for America. Russia has an outpost called Ingushetia to guard against Chechen fighters. Even China has terror at its back door.

Energy-poor Europe really has no choice in the matter and America is powerless to stop it. This is what made Ukraine such a target. Russia is diverting all pipelines into Europe through Turkey instead of Ukraine, making the entire exercise there moot. This is what makes the middle-east, the Spratley Islands in the South China Sea, North Korea, and Lithuania so important to the west. This is why the west (and NATO) is trying to encircle Russia and break up Eurasia, but what’s the expression again…? A day late and a dollar short (pun definitely intended.)

One could draw a line from Beijing to Moscow and cross only one country, Kazakhstan. Kazakhstan may be where the new Prime Meridian passes, where the new UN headquarters might be located, and is where the world’s monopoly of low-enriched uranium (LEU) is kept. Buffett knows it, too. Kazakhstan is land-locked and so is very easy to defend.

It’s over.

China is starting to unwind, all of Eurasia will be dumping the dollar very soon (?this summer/fall?) the petro-dollar’s days are numbered (Saud has been in negotiations with Russia for years now over this very issue) and if America doesn’t wake up to this incontrovertible fact, war will be the only option. If the USA and NATO and the EU start making preparations now, perhaps there could be a way to draw this out nicely enough not to have to crash the western economy. They could also all be working behind the scenes together, east and west, knowing that the inevitable is coming. Hey, ya’ never know.

As it happens, last year, American private equity fund KKR bought Mexico’s Pemex Oil. They have secured rights to drill in the Gulf of Mexico, and now they are moving even further south. Venezuela seems to be the next target now that the Americans know they have lost the middle-east, and will soon have to leave.

“Seventy percent of Petropiar is owned by the state-run Petróleos de Venezuela, and 30% by its overseas partner, Chevron. The government has now offered to sell a portion of its shares to the Russian Rosneft, along with a stake in the rights to extract oil from the premium-grade Orinoco Oil Belt. This, of course, is no less than a stab in the back for Chevron. (Rosneft faces sanctions from the US, which, of course, Chevron does not.)

Venezuela has also expropriated shares belonging to ConocoPhillips, for which it has not yet paid, at the same time as they’re negotiating with a Japanese investment bank to obtain further funding.”

These deals, in the American perspective, are worth protecting and fighting over especially if Russia’s Rosneft gets control of some of the oil in the Americas.

“The involvement of the U.S. military in an upcoming multilateral military drill in South America has raised concerns over potential ulterior motives on the part of the U.S.

 

The drill, dubbed “Operation: America United,” will involve the installation of a temporary military base on the triple border shared by the drill’s other participating nations: Peru, Brazil and Colombia.

Clearly, the Americans know that their time under the petro-dollar scheme is winding down, and they are desperately seeking alternative sources of oil. Now that Erdogan has refused the EU membership and is looking east, even the Germans are moving their troops from Incirlik to Jordan. They too must sense that something is changing within NATO and in the middle-east.

All this talk of populism vs. globalism (I was caught up in it, too) is like so many squirrels scurrying to hide their nutz. This is also why we needed the king of all squirrels, Donald Trump, to completely dominate our lives. After two years of him dominating the main-stream media scene, much of the groundwork has been done quietly, and in the shadows.

Erdogan: Richest Man On Earth?

Maybe ‘the most powerful man on Earth’ would be more appropriate. Let me explain.

Turkey and the EU have been in limbo now for almost thirty years. Turkey has wanted to join, but there have been doubts about its stability… well-founded doubts.

Recently, the west’s relationship with Turkey has soured. Erdogan has been playing both sides of the conflict in Syria. There is little doubt that he has sponsored mercenary forces to overthrow Assad, that he has moved Daesh oil, and that he has attacked both the Russians (by downing a Sukhoi) and the Americans in Syria:

“The Turkish statement clearly dismissed speculations that Ankara forces hit US-backed fighters in Syria by mistake.”

It would seem that Turkey has said goodbye to its EU aspirations, and perhaps the EU has also:

“The European Union has warned that the bloc could redefine the entire status of its relations with Turkey in light of recent developments in the country and amid growing disputes between the two sides.”

As I have written in past articles, if Turkey looks to the west, America wins in the middle-east along with its allies Israel and Saud. They would essentially control all the pipelines through Turkey, the Euphrates river, and the Mediterranean. Assad would be ousted, eventually. The Russians would lose access to the Mediterranean, and would be blocked at the Bosporus. New terror groups would undoubtedly spring up to threaten Russia from Georgia and Chechnya. This would give the west more power over Ukraine and Crimea, where the focus would undoubtedly shift. The globalists would win, too, by the way.

If Turkey looks east then the New Silk Road will be a ‘fait accompli’ giving China land access to the EU and giving Russia more say about what happens near its borders (with Georgia and Ukraine.) New pipelines would be built to bring Iranian oil to markets in the EU. The China/Russia/Iran/Kazakhstan connection would win over India, in time, as well as Saudi Arabia. The price of oil in America could quadruple overnight, shale or no shale. Populism would soar across the west and the EU, and Assange would be free to leave the Ecuadoran embassy in London.

Turkey looking east would almost instantly save Assad, sever the links between America and Saud, which would lead to the destruction of the petro-dollar scheme, which would kill the US dollar, which would, in turn, bring down all the central banks in the EU. The world’s derivatives markets are highly sensitive, especially these days, to the effects of any downturns with the central banks, just ask Douchebank (ahem) I mean Deutsche Bank. Actually, don’t; they’ve been very tight-lipped about the whole situation.

Deutsche Bank Tells Investors Not To Worry About Its €46 Trillion In Derivatives

 

The entire derivatives market is worth an estimated 1 quadrillion dollars, and if anyone of its substantial pillars were to fall, well, let’s just say that things would not end well. If the whole thing fell apart, it would be the end of America, and the EU, as we know it.

See here for a nice graphic representation.

So there we have it, Erdogan looking east would blow up the western world’s economy more assuredly than any bomb Russia could drop. Putin could end up beating the Americans simply by making nice with Erdogan. He wouldn’t even have to launch a missile. Good thing the west was thinking ahead, allowing a scapegoat like Trump, who would certainly be blamed, to win the white house.

Who’d have thought that the entire populist movement, the western banking system, and the fate of the western world, for that matter, depends not on Trump, or Le Pen, or on Farage, or even on Wilders, but rather on a paranoid dictator worth 1 quadrillion dollars headquartered in Turkey named Recep Tayyip Erdoğan, and all so he can kill some Kurds?

Putin maybe, but he’s always been good at chess, and there ain’t no Bobby Fischers left.


UPDATE

It would appear that Turkey and Russia are indeed getting closer…

Russia’s Gazprom CEO Alexei Miller said Wednesday that the energy giant will begin the offshore laying of the Turkish Stream pipeline in the second half of 2017 and plans to complete the construction of two legs by the end of 2019.

…much closer.

Turkey, Russia clinch agreement on S-400 air defense system deliveries

Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan will meet face-to-face in Sochi on May 3 to discuss these and other matters. Clearly, the rapprochement since Turkey shot down a Russian jet is going well, much to the dismay of the west.

Vladimir Putin believes that Russia and Turkey are restoring full-format relations

“I’m sure that those steps that we are taking together will change the fate of the whole region,” Erdogan said.”

And they lived happily ever after…


Follow up to this article is here.

Setting Up For Failure??

With the past year’s electoral comedy festival coming to a close today, and with Obama’s economy (let’s face it) in the toilet, is it any surprise that the Dow went up this morning? Futures are up, PMs are up, even CNN’s ratings are up, hope is on the rise, and change is in the air… change not even Obama could have foreseen.

Whether you voted for a billionaire, a billionaire wanna-be, or you stayed home and didn’t vote (majority,) you have just witnessed the most vitriolic fight ever to have rocked the airwaves on CNN. But was it, as is all the other ‘news’ on CNN, all just a show? One of your candidates would have been beholden to Goldman-Sachs, the other will be sipping lemonade with them at his country club(s.) Some choice. Some democracy.

Billionaires have been moving their money out of the markets and into gold for the last year or so. Out of risky investments (they are all risky these days) and into wealth storage goes  the ‘smart’ money (I would call it the ‘informed’ money, but I digress) whereas the rest of us are being lulled into buying stock at the (obvious) top of the market. Someone is gonna’ make a killing, and somebody else is about to get fleeced… usually the sheep.

More and more experts are hedging against a catastrophic crash in the markets – they say it will make 2008 look like a minor hiccup – and betting on $5,000 gold, and many have been saying this for some time. Meanwhile, the manipulated markets are levitating on fumes. The crash is being postponed. Someone wants Obama to go out looking like a hero. Easy when unemployment numbers don’t include those who’ve stopped looking for work. Unemployment, by some estimates, could be as high as 20%, and with the national debt growing exponentially, population rates dropping, a soon-to-be-retired population aging fast, tax-havens for corporations, a growing prison population, and a bankrupt pension industry, the tax base is falling fast as spending (especially military) is going through the roof and government is growing faster and faster every year. Hell, even the cost of presidential libraries is more than doubling every term.

I used to think Trump was just thrown in to the mix in order to divide the Republican vote and get HRC elected. Could be, but Trump really was an anomaly. Did he really take the country by surprise, or were there those who had a plan all along? I’m starting to think that when Trump was first being seen as a champion for the people, others were taking advantage of the situation to further their own interests.

The economy could not be held up on ‘good news’ forever, they needed a way out of the downwardly-spiraling miasma beyond blaming the weather, or at least someone to pin it on. So the economy was propped-up for the exit of the Nobel prize-winner, and once Trump is inaugurated, the wheels will be allowed to come off. The end of 2017 could see the VIX at 100!

Since Brexit and talk of other countries leaving the EU, the big debate around the planet this year has been about one thing – globalism versus the dangers of populism. What if globalists are using Trump as a fall guy, a scapegoat to blame the coming crash on? What if they have their fingers on the markets just waiting to pull the plug? What better way to defeat populism than by using its own best champion to bring it down? “You see? We told you that he was dangerous, didn’t we? We told you globalism would prevail. Now show us your papers.” And that’s just the economic side… there’s also this situation in the middle-east involving Russia, Saud, Turkey, et al, but that’s another story.

Would it surprise me? No. Nothing, at this point, would surprise me.

*Update*

via Zerohedge: “Mario Draghi Hints Trump Will Be Responsible For The Next Financial Crisis

The Trump Collapse Scapegoat Narrative Has Now Been Launched

The media was building the foundation of the narrative from the moment Trump won the election. Bloomberg was quick to publish its rather hilariously skewed propaganda on the matter, asserting that Trump was lucky to inherit an economy in ascendance and recovery because of the fiscal ingenuity of Barack Obama. This is of course utter nonsense. Obama and the Fed have created a zombie economy rotting from the inside out, nothing more. But, as Bloomberg noted rightly, any downturn within the system will indeed be blamed on the Trump administration.

Fortune Magazine, adding to the narrative, outlined the view that the initial stock rally surrounding Trump’s election win was merely setting the stage for a surprise market crash.

I continue to go one further than the mainstream media and say that the Trump administration is a giant cement shoe designed (deliberately) to drag conservatives and conservative principles down into the abyss as we are blamed by association for the financial calamity that will occur on Trump’s watch.

Personally, I think it less about left vs. right and more about us vs. them. It’s a class thing. Both conservatives and liberals will suffer through the next major crisis, but populism will be pummeled.

Trump: The Most Misunderstood Man in ‘Merca

Donald Sterling, of ‘Los Angeles Clippers Owner’ fame, was branded a racist. He had been recorded making racist remarks; he admitted to them and apologized. His English grammar skills are mediocre, at best. After his explanation, he came out looking very bad.

Some people, whose family smoked in the house while they were children, became addicted to nicotine before they ever started smoking. It was just ‘in the air.’ Do you see where I’m going with this?

Donald Sterling was raised in a racist environment (as was everybody else back then) and even if it was a passively racist environment, his father would have been raised in a much stricter one. He knew it was wrong, and he hid it publicly, he tried to suppress his urge to smoke. He never explained himself in this way. If he had, he might still own the Clippers.

I’m not defending Donald Sterling, but he was an old man, and his talk would have been normal at the country club. ‘I don’t mind them, per se, just don’t bring them home.’

However, when refering to how tough HRC’s father was, phrases like, “…but it was a different time back then…” and, “…he was old-fashioned…” sprung up apologetically.

Trump finds himself in very much the same position, only, it relates to sexual harassment against women, which is now a very touchy subject. The problem is that it wasn’t considered sexual harassment at the time, it was tolerated and even encouraged to a large extent, so why should he be held to that standard? Some of the women who allowed it, in order to further their careers in a male-dominated world, benefited greatly and ‘played the game.’ That should not need to happen in a civilized society, but then again, sex sells… it always has.

And a paid escort suing him for kissing her?!?

It’s hard to blame a billionaire for indulging; you just know that their tastes for exotic things and experiences often lead them to debauch. Even a sixteen year old with a Ferrari will be tired of ‘just’ banging super-models by his mid-twenties. When one can afford anything, what won’t they be tempted to try? How far will they go?

He is a braggart and pompous and spoiled. He should own it more. So should Sterling have. He tends to talk in hyperbole. He gets picked on a lot for this, but as for Donald Trump’s language skills, I think the man truly has a great deal of trouble translating what’s in his head into words. He didn’t study much English at Wharton. I suspect many politicians and public figures have this same problem. I’m not saying that all his foibles are attributable to his poor communication skills, there are some old vestiges in there, of times long past when you could dry hump a girl on roller-skates while doing a line on the table. Nobody cared what you did. Everybody has done something embarrassing. Billionaires just have more opportunities to, and the spotlight on them when it does. But compared to all the allegations against the Clintons from Whitewater to Pay-to-Play and the implications thereof, he’s just a street-smart buffoon, she’s a diabolical lawyer, and she is very good at what she does. So was Madoff, until he got caught.

[A no-fly zone in Syria (which HRC supports and Trump does not) will undoubtedly lead to WW3 with the Russians.]

Still, when pundits misinterpret an already flawed message, the results can be very far from those intended.

Trump’s a businessman who takes advantage of the laws in place, and has had to compete with others all his life. But now he’s put himself on the other side of that. He knows what needs fixing. I’m not an apologist for any of the stupid things he’s said, I just think that he needed help in framing his very general ideas. It took forty-three minutes to get a minute of locker-talk out of him. He was bragging and I think he probably did grab a lot of women; I’m not condoning that, but it was a far lesser offence forty years ago. And he has always skirted the law, as a rule, always seeking the greatest advantage. Isn’t that sort of thing supposed to be revered, or are people so depressed economically that anyone who gets more than their share is vilified. Is this a struggle over capitalism itself, or rather just our version of capitalism today? Implied socialism ??

I don’t think he’s as radical as they make him out to be, and yes, the media and the establishment show great bias, but it really shines a light on the people on either side. The Hutu knew who the Tutsi were… and vice-versa.

The issue of the American election, and of Brexit before, and the colour revolutions throughout the ME, and even the situation in Ukraine have all led to the inevitable binary showdown: Globalism vs. Populism.

Is this the start of WCW (World Class War?) Or are we avoiding a war with Russia/China/Iran/Kazakhstan? Which way will the Saudis align themselves? Is Syria the tipping point? What the hell is Trump gonna’ do about that? He has to withdraw pressure on Syria immediately, put Erdogan in his place (impossible – the Turks have had their land much longer than ‘Merca’s been a country – it controls all the pipelines and most of the water in the ME,) make nice with the Russians by withdrawing NATO and removing missiles, leave the South China Sea, and withdraw into a protectionist shell, like Iceland, saving the world from globalism.

I don’t pretend to know what’s about to happen to the world, but a lot of people feel like it’s not going to be good; it’s as if all the animals know that the earthquake is coming and start to scatter. But where is there left to go?

Gold is one place left to go. Silver is another.