HODLer of Last Resort

@TXMCtrades Right but you said this has nothing to do with the bitcoiner idea of a hard money standard because money supply was expanding. My point is, what if it doesn’t matter whether M is contracting or expanding, what matters is P is outpacing it, or even just contracting slower.

@jimyoung2817 It's in the post.

Really enjoying this book. A fascinating study of the last 30 years of the 19th century, and how the economy grew during price deflation. Though not, as many believe, a result of sound money, but rather a culmination of huge technological leaps (railroads, mechanized agriculture, telegraph, electricity, Bessemer process (steel), etc) and high population growth that doubled and tripled productive output in a brief period of time. Gets a bit wonky at points, but the research is written in plain language and very thorough. Recommended for enthusiasts and especially Bitcoin folks looking to better understand the dynamics of deflation.

@TXMCtrades Sorry to over simplify but have you considered the idea that if productivity growth P > money supply growth M, it’s deflationary whether P and M are both positive, P is positive and M is negative or P and M are both negative? That all those scenarios are functionally the same?

Books conclusions of deflationary forces: * massive buildout of railroads expanding economic footprint to new places * Innovations like electricity and Bessemer steel production growing commodity output _exponentially_ * economic output outpaced money supply growth (both were strong) which structurally reduced prices while volumes increased * huge population growth with a third coming just from immigration, strongest share in US history. This grew labor supply relative to demand. * Decline in labor demand relative to output thanks to technology (like mechanized agriculture) * both above forces created downward wage flexibility (wages fell during strong growth), letting firms retain a better share of profits (allowing them to keep investing) * Shift of distribution of workers from lower productivity industries (agri) to higher productivity industries (manufacturing) * because of huge gains in output and wage flexibility from strong labor growth, firms retained profits and industrial stocks outperformed others, even tho price level fell * technology gains and wage flexibility were THE reasons for strong growth despite prices falling. money supply was inflationary for majority of the era. * real wages were somewhat stable to outright declining (due to flexibility) across the whole span, with periods of gains separated by drops in purchasing power. * growth occurred despite growing social unrest, in part because of perceptions about falling prices equaling stagnation (despite money supply growing). * author concludes that these factors were unique in American history, especially downward wage flexibility and immigration strength, and unlikely to be duplicated in a modern economy without significant changes to govt priorities (deprioritizing full employment being primary). The gains in goods production are also uniquely strong vs any other period. For the Bitcoiners: nothing about this story is comparable to a fixed money standard. Money was quite the opposite- it inflated for most of the period (declined in the middle), both gold stock and broad money. The cash of the era was quite elastic. Wage flexibility was THE power behind firms retaining profits and investing power, and it was made possible by unique labor force factors that are tough to replicate. Productivity does not emanate out of deflationary money, it comes from strong investment and a resistance to wages gaining too much a share of income vs profits. The book even mentions that if not for the wage flexibility, the period may not have played out as successfully. A true unicorn period in our history. Might make a video to cover these points along with the great charts shown in the book.

Hey @Grok, did Israel poison Palestinian water wells with deadly typhoid bacteria in 1948 ?

@EastEndJoe @ggreenwald 😂

Meanwhile…. Lindsey Graham:

@MrsHodl Rarely. I’m split on it. On one hand I like to spread awareness and normalize it, but there are several reasons not to on the other hand.

Do you wear Bitcoin attire in public?

This is arrogant and bellicose. Complete disregard for the electorate.

@MonetaryWonk Stupid implies lack of knowledge or reasoning capacity. This is worse. Arrogant. Disrespectful of the electorate. Bellicose.

Stupid

@knutsvanholm Nice try, IRS

Have you ever memorized twelve words?

@TreiberS @AAGDhillon @cdrsalamander Good to see you Treiber, sharp as ever.

@AAGDhillon @cdrsalamander Told us what, exactly? That dead people don’t get purged immediately? No shit. Did you also mention that they don’t vote??

Told ya

@TXMCtrades I imagine a stoner might love this. (I look at that and all I see is poison).

No one: Truly no one: Absolutely no one in the known universe: Dairy Queen:

@MonetaryWonk No, inflation IS a boogeyman that artificially drives equity and housing prices up, benefiting asset owners at the expense of non-asset owners. There are 10+ different mechanisms that might fall under the umbrellas of capital structure arbitrage or monetary escape valve (SoV).

@jimyoung2817 Yes, wage growth eats into margins, which ultimately reduces price growth for equities. Other assets like housing are a supply/demand problem.

Unpopular opinion Most fundamentally misunderstand how the economy works. They believe inflation is eating paychecks, and forget that wages adjust IF workers have bargaining power. The problem is, in a low growth/low inflation/medium unemployment environment (say post GFC), workers don’t have bargaining power. What we really need is consistently robust NGDP growth and LOW unemployment. This environment favors workers - and we’ve barely had it over the past 50 years. Otherwise, capital wins. Inflation isn’t the boogeyman, it’s just a scapegoat. It should be, whatever it needs to be, to achieve the goals above. The real issue has been unnecessarily high unemployment enabled by int rates that were systemically too HIGH. Aggressively targeting NGDP at 4-5% - through either fiscal or monetary policy - would help solve this.

I'm going to take a break from Twitter for a little bit. Just lost a close friend in a tragic accident. I don't discuss it often, but I lost a lot of squadron mates in the Navy. It was always sudden, unexpected, and of course violent. People who went out and never came back. On stage recently at Bit Block Boom I discussed how many times we are so focused and centered around Bitcoin that we forget to live. To enjoy the moment. Often as Bitcoiners we are "waiting"... for something... someone... some day. Life is finite. You only have so many blocks to be mined. This thing called life is not about the destination. It's not about when you've "made it". Don't waste this gift.

@MrJThomason @TXMCtrades Makes sense. Thanks for the explanation.

@jimyoung2817 @TXMCtrades Rights exist naturally (per Locke et al.), independent of gov’t. But enforcement/security requires public goods (defense, courts, etc) funded by taxes to prevent chaos. Existence ≠ practical protection. Locke: gov’t’s job is securing them. Social contract. Thus, trade-off.

Because you paid your mortgage to a bank who lent you the money. Your property taxes go to the city you live in to pay for public services.

@MrJThomason @TXMCtrades Help me understand what you mean by: “Rights require government enforcement of public goods.” Are rights not natural and existent independent of government? I suspect this is where our views diverge.

@jimyoung2817 @TXMCtrades Taxes are compulsory but lawful (via elected legislatures). Voters have input through elections & referendums, or can exit. Rights require government enforcement of public goods. Waste demands reform, not redefining taxes as rights violations. It's a trade-off, not predation.

@Esiotroggoth @TXMCtrades Doh!

@jimyoung2817 @TXMCtrades I know. I was playing devils advocate.

@MrJThomason @TXMCtrades You can bicker about the term and hide from issue, or you can try to understand the problem. Tax payers’ money is taken away by force, spent in a variety of ways that they have no say over; some good, some wasteful, and some literally criminal. It’s clearly a theft of rights.

@jimyoung2817 @TXMCtrades "Feels like" isn't "is"

@MrJThomason @TXMCtrades Let’s add nuance. Taxation forcefully takes capital from the payer but returns infrastructure that has value, so technically not theft. But what else does taxation take? It takes the Decision Right over how and where it’s spent, away from the payer. And that feels like theft.

@TXMCtrades people will say taxation is theft while they drive on roads they did not build to to utilize services they did not create and expect police, fire, and emergency services to come to their aid if something goes wrong

@Esiotroggoth @TXMCtrades Your investment derives much of its value from the fact that public infrastructure exists around it. Benefiting from this without paying for it is called “free-riding” and tax policies tend to discourage that.

@TXMCtrades But what if the property is just an investment, and i live somewhere else

Then go make art and be in your garden. Nobody is stopping you. If you say "but then how will I pay rent and eat!", then your actual complaint is you want stuff to be handed to you for free. Which means *others* have to work to provide for you, and not make art or be in gardens.