Bitcoins - deep thoughts from FOFOA

The quality of analysis normally given to Gold is being applied to the Bitcoin situation by FOFOA ("Friend of a Friend of Another"). After a coupe of open forums, FOFO dives in on Open Forum 3 and concludes:

One of the reasons gold is money is that, of all the physical elements that meet other monetary requirements, gold is the one that comes closest to achieving the perfection of this monetary property that Bitcoin achieves, being completely worthless aside from its monetary uses. Bitcoin is truly an artificial, purely symbolic currency, which makes it, you guessed it, just like all the fiat currencies in the world today. Except there is one big difference: Bitcoin has a limited supply!

What this means in practical terms is that Bitcoin is a hard currency. And remember, hard means difficult and inelastic. Today Bitcoin is trading as an asset backed only by the speculation that eventually it will be sufficiently accepted and adopted as a medium of exchange. Let's be clear about this. Today Bitcoin is not widely (or sufficiently) accepted and adopted as a medium of exchange. Today it is a speculative asset backed by nothing more than being a neat idea mixed with a little misguided hope and speculation. As strictly a medium of exchange, today, Bitcoin is redundant and superfluous.

FOFOA is wrong about silver, he may be wrong about Bitcoin. Worth reading as always.

See Open Forum 1, Open Forum 2, and Open Forum 3.

The new economic model in a nutshell

This has more the taste of truth than of mere analysis:

Government deficit spending, financed with paper money creation, has replaced debt-funded private consumption as the principal source of global growth.

Housing woes

Everytime I think I'm ready to move out of the paleolithic age, an irresistibly attractive cave goes on sale.

McLuhan's 100th

There will be 15 conferences on McLuhan in Europe this year commemorating 100 years since his birth. Very little seems to be happening in the USA, however. Will have to post a few things. Here's a mini-eulogy.

Sunday joke

A shipwrecked man is washed ashore where he meets a castaway. After an excited exchange, the shipwrecked survivor points to a shape in the distance and says, "What's that?" The castaway says "I built it myself. That's my church." The shipwreck survivor points at another shape nearby and says, "What's that then?" The castaway answers "I built that too. That's the church I used to belong to."

Guadalajara - decency preserved

From the Guadalajara Reporter last week:

Protestors taking part in the World Naked Bike Ride on Saturday, June 11 have agreed to wear swimsuits and underwear after Guadalajara city hall officials slammed the gesture as an offense against public decency.

Good.

The White House has a revolving door

The twin memes of radicalism and incompetence continue to dog this administration. Its CIO unveils a 25-point technology plan and then departs.

What would H.L. Mencken say?

"Every election is a sort of advance auction sale of stolen goods."

Convergence

Alan Keyes used to say that the problem in this country is not economic, it's moral.

The two converge when you consider "the US Government is now paying over 1/3rd of US incomes… and it’s financing this by having the Fed buy new debt from the Treasury."

This is much more than a dollar and cents transaction and its moral meaning must be clear to the actors involved.

A solution to the Greek crisis

This sounds radical:

1) Kick them out of EMU and send them back to their miserable drachma, which would, of course, suffer an immediate devaluation of 50% or more...

2) Allow European banks to continue to accrue interest on Greek government debt... the European Central Bank will issue scrip to the banks in the sum of unpaid coupon payments ... “I bought your paper from the guys you owe, and now you owe me..."

3) ...seize Greek assets everywhere in Europe, starting with foreign-currency bank accounts, Greek ships in international ports, and so forth...

4) Demand that the Greek government seize the property of Greek citizens who have not paid taxes and auction it to foreigners. That would bring in plenty of foreign exchange. Sell the Parthenon, too. Sell it all.

This sounds like a bankster's fondest dream. Outrageous? Compare it to the Icelandic option of default and I think this elaborate scenario has more chance of being realized.

The difference between Iceland and Greece is that the French and German governments hold so much Greek debt.

Weekend reading: Spinney's death spiral

Blogging will be light over the weekend. Those of you who have not yet encountered the famous Pentagon procurement spiral of death are urged to make time for this essential reading.

Spinney's study is a classic and is referred to constantly. Gates, on his way towards the exit has quoted the underlying idea more than once last week.

The real Wall Street dress code

You should dress according to your career path. Droll. And here's a special tip for the ladies, from a "man of a certain age" - cover up.

Cyber-bullying - arrests have begun

"They were just degrading everybody on there, it was ridiculous." Actually, a youth was mocking his classmates.

I had better tone it down, myself, then.

Driving safety mythology

John Adams is in fine form bursting these bubbles.

The finger-pointing has begun

"The Afghan war is lost. So now who'll take the blame?" - Guardian

Keep four more fingers free for Iraq, Libya, Yemen, Kosovo.

The decline and fall of "Gun and Garden"

What has happened to "Gun and Garden?" WHERE ARE THE GUNS? It's become a roaming garden variety city magazine.

Defending the dollar?

Extraordinary coincidences:

(1) Quebec raids Kitco; Kitco badly wounded

(2) Bitcoin struck by malware

(3) The World Gold Council (of all organizations) comes up with a clever new plan for keeping much Gold off the market

What will they think of next?

What would Nicolás Gómez Dávila say?

"Nobody in politics can foresee the consequences either of what he destroys, or of what he constructs."

"Nine tons of historical excrement"

No, not the Congressional Record: "waste that has been found in the sewer system of the town of Herculaneum, which was buried by an eruption from nearby Mt Vesuvius near Naples in AD79."

You send your daughter to Penn and she aces archeology, lands a gig in Italy, and gets to sift through this.

Girls, please get the grapes off the table.

Content analysis: "they feasted on sea urchins and dormice as well as fish, figs, olives and eggs." Insufficiently interesting, except for the dormice. Find a new project.

To capture "movement" votes

... the GOP must divorce free market support from big business support. Amen? A short piece from the Manhattan Institute points this out but the argument needs to be developed across the right.