Posts by I ain't Spartacus

Re: Success of fiat

\MonkeyCee,

I don't think you understand this money thing correctly. Not that it isn't hideously complicated There's been a lot of nonsense talked about it since the great recession. For example, when I see the phrase "private central banks" that seems to be a warning sign that someone has taken on board too much of this stuff. Central Banks aren't private. They're owned/controlled by the government. The Bank of England started that way, and the US Fed is technically owned by its member banks, but as they're not allowed to sell those shares or choose who's in charge, or set the targets, it's basically a legal fiction of ownership.

Government debt and fiat currency aren't the same thing at all. Though many definitions of money do include government debt, along with bank deposits and various securities (depending on where on the scale you are from M0-M6). Your example of tally sticks, which were markers of debts owed by the monarch/treasury. Those were not a currency, though could be counted in some definitions of money. The currency was the coinage. A few English kings defaulted on their debts (or imprisoned their lenders), but what affected the value of the currency was kings like Henry VIII who massively debased the coinage.

Once you're on the fiat tiger the only way to get off is to default, which can be made rather difficult depending who your bonds have been sold too (see Argentina).

Again, you've misunderstood this. There is no fiat tiger. Fiat money is just a way of keeping score. Obama didn't print trillions of dollars, the Fed did QE. And not because Obama told them to, but because Ben Bernanke happened to be one of the foremost academic experts on the 1930s Depression - and that was his proposed solution. It had the benefit of having worked in Japan in the 1930s, so had been tested once. QE is not money printing. It might look the same, but it isn't, because it's designed to be reversed.

Argentina defaulted because their currency had already devalued, and they'd borrowed in dollars. So now they couldn't meet the interest payments. People didn't lose confidence in the Peso after the default. Once they couldn't maintain the fixed exchange rate, government default became inevitable. But the currency didn't devalue further after default, in fact it slowly increased against the dollar. This is because Argentina had an export boom in soya, and other agricultural products, and were no longer having to buy much foreign currency to service their debts. Meanwhile, at home people continued to use the Peso, and everything was fine - despite it having just been the biggest default in history. It was only the next government that then started to print money, break the independence of their Central Bank, and falsify the inflation reports. Which caused the huge inflation they're now dealing with, and did undermine confidence in the Peso.

Had Argentina not borrowed in dollars, but in Pesos, they'd not have had the same crisis. Firstly the government wouldn't have been able to borrow so much - they borrowed a lot under US law, because investors knew they couldn't default on it, or manipulate the courts. But also, when they went off the exchange rate peg to the dollar, their government debt would have devalued along with the currency (at least to foreigners). To everyone in the Peso economy, it would maintain the same value. Once you use a free floating currency, the feedback loop between government creditworthiness and exchange rate is mostly broken - and the exchange rate will be set by flows of money for trade and investment.

Similarly the Weimar hyper-inflation was because the government was printing money to service its huge foreign debt. What gave confidence in the currency again, was because they partially defaulted on that debt. And stopped printing money, sending so much money abroad and re-valued the currency. So no, a default need not affect faith in the currency itself.

Finally, you keep making a distinction between fiat currency and FLAT currency. Is there a language issue here? I've never heard of FLAT currency before, and quick Google gives me no clues either. It's 25 years since I studied economics, so is there some new terminology I'm missing? Is it a term common in crypto-currency circles?

Re: Success of fiat

MonkeyCee,

Fiat currency and government debt are not the same thing. Many governments have defaulted on their debts, but their currency has survived perfectly fine. The people who lose out when someone defaults would lost out whatever currency that debt was denominated in. Though a loss of confidence in the government can be more serious.

Countries tend to keep their currencies. And even when they (country or currency) collapse, often create new ones and allow people to bring their existing holdings across (sadly often at a loss).

But a fiat currency will basically work so long as enough people believe in the continuation of enough of the institutions and economy of the country that uses it. It might not work perfectly, you might get inflation and deflation and exchange-rate fluctuations. But people will still continue to use it as a means of exchange and a store of value. It's only when trust completely breaks down, as it did in Zimbabwe, and looks like it has/will in Venezuala.

Even in Weimar Germany, the period of hyper-inflation only lasted a couple of years. And that's the most famous example of wheelbarrows full of cash that couldn't buy a sack of potatoes. By 1924-5, they'd got inflation under control again. It wasn't inflation that lead to the rise of Hitler, it was the unemployment and deflation after the 1929 crash that brought Hitler to power. A lesson often forgotten.

It's the deflation in Southern Europe (and consequent unemployment) that will bring down the Euro, if they don't sort their shit out pretty quickly. At minimum with a proper banking union and some sort of system to deal with government debt crises, though to make it work properly requires fiscal transfers.

Fiat currency came along, and despite many failures has supplanted all comomodity-backed ones.

Fiat currencies have also failed. But so have commodity-based ones. Spain found loads of silver in South America. Hooray we're rich! Oh shit, we have inflation, we're no longer rich. Help! The gold standard went wrong more than fiat currencies did. Which is why not only is it no longer used, but almost nobody serious suggests going back to it. Maybe we'll find something better in future, I'm no believer in "the end of history", but so far we haven't.

Crypto currency is just fiat money with nobody in control. OK, in Zimbabwe that control was a bad thing. But the Eurozone was saved by it. The disorderly collapse of that could cause a 1930s style global depression - governments do have their uses. Even if it was the bloody governments that created that particular disaster-waiting-to-happen themselves.

I don't know why you complain about seigniorage though. Sure the US government makes a bit of money from printing dollars. But it's not all that much, and that profit goes to the US taxpayer in government spending or lower taxes. What's your problem? All currency issuers get that benefit. The more they're trusted, the more they get. With the gold standard, that value goes to the gold miners. With Bitcoin it went to the original creators and the miners. The difference being, they didn't share it with anyone. I don't really see it as a relevant point.

Re: I'm forever blowing bitcoin

handleoclast,

The Labour Theory of Value isn't mainstream economics. I think that's from Marx, if I remember correctly.

But you're obviously right that nothing has a fixed value. However nothing's absolute. A £5 is worth nothing if confidence in the UK currency collapses. But that's not happened in a very long time, which of course boosts confidence. But you can destroy a currency, as Zimbabwe did, and Venezuala are doing. So currencies are based on everyone agreeing they're worth something, which remains true until it doesn't - often quite suddenly.

An apple though has a use. Until it goes off. As does steel or gold. You can argue what their value is, but they have an intrinsic worth of something. As do Bounty bars you heathen! Although in my case the dark chocolate ones, I'm not really bothered by the others.

RobertLongshaft,

Fiat currencies are backed by governents and the whole economy that uses them. Which is why they've been so successful throughout history. But even some of those fail. Bitcoin is truly backed by nothing but faith When faith wobbles, governments can try to step in to save their currencies (see the Euro for a recent example) - there is nobody to save Bitcoin.

Bitcoin's also a bubble. Because people are backing it as an investment, but there's no possible return but other investors. And that very process has destroyed its use as a currency, as transaction costs are now so ludicrous.

But bubbles pop when they're ready to. This is what makes them so dangerous. The people that see it, get told they've been "proved wrong" and so ignored. Until they're finally proved right later. I think it was UBS that sacked their CEO partly for refusing to buy all those nice mortgage backed CDOs in the last decade - and thus forgoing juicy profits. Did they apologise and re-hire him in 2008 after he was proved right?

To quote John Maynard Keynes, "the market can stay irrational for longer than you can stay solvent."

Re: It's the standard planned Exit Strategy

Or even if it's not planned, it's such an obvious move to make. You've got large amounts of a hard to trace commodity with value. You're not regulated or audited terribly well, and they tend to be quite small organisations So if profits collapse, or something goes wrong, or even if there's a genuine small hack that's going to destroy confidence in your company, what do you do? Well you could just shut-up shop. But the temptation is going to be there, to make off with the stock and say "a big boy did it and ran away."

That was what happened to all the banks when I played EVE Online. Even the honest ones. They got the admin wrong, screwed up, or just got bored. Then as often as not, took the rest of the money and ran. Something EVE encouraged of course...

Re: Insurance?

A properly regulated exchange would have to have some of its own assets to cover such losses, as well as insurance and proper security. But this is Bitcoin, so there isn't any proper regulation.

But then opposing regulation (and taxes) is what many Bitcoin users want.

Whereas in regulated financial markets, when someone gets past the security you'd have a good chance to track the stolen money / stocks / bonds. And of course a lot of the work isn't done on the open internet, which surely makes security a bit easier.

Re: Speculative bubble bursts, economy fine

Also, if you're hacking an exchange to steal its Bitcoins, why would you want to reduce their value further by shorting the currency?

It'll be interesting to see if the SEC find anything in their probe on Bitcoin price-fixing. Which is much more likely to be people trying to drive the price up. Not something that's hard to do, given how small trading volumes are. Low trading volumes being the reason prices are so volatile anyway...

Although, there is now a way to effectively short Bitcoin. Since you can now trade Bitcoin futures on CME, which is a proper exchange dealing with a large chunk of the global futures market.

Re: Storm in a teacup

KarelE,

I don't use Linux, though I've played around with it a little bit. So I'm just a watcher from the outside. You're right that Systemd is here, but I don't think the community shows much sign of getting over it. At least not soon. Maybe it'll win over the doubters, improve and become standard everywhere in a few years time. But on the other hand, maybe those in charge of it will fuck up once too often, or manage to piss off too many distros, so that it loses critical mass and fails. The latter looks as (or more) likely than the first to me - because the arrogance and arseholery on continuous display from Poettering is likely to have consequences every so often.

Re: News to us in the U.S.

No, it's on time and within budget since the last time we "updated" the budget and schedule.

Maybe it'll even meet these new targets. If not, we can always make some more...

Re: They can do some amazing things

Isn't this what happens witih most military systems though? Especially the complex ones.

The only question is, does enough money get invested in fixing them once they're taken into service. Which given the huge numbers of these being bought, is pretty likely.

The original Lightning was great for example. But was shit for serviceability, because you pretty much needed to take an engine out to get to anything else inside the airframe. Meaning that 15 minute maintenance jobs took 10 hours.

Re: Er, what?

Ever heard of ISIS and Al Qaeda? I'm sure they've been in the news the odd time or two...

As it turns out, the times we've allowed them to hold territory, they've recruited and trained large numbers of people for terrorist attacks back in Europe. Hence making the calculation that allowing them to hold territory might be a worse idea than the alternative of using military force to stop them.

You may think that calculation is wrong, but you can't call it irrational.

Aren't Turkey only doing engine maintenance? So you just crate the engines up and ship them there. Fly if you're in a rush. You tend to have more engines than combat aircraft anyway. Because maintenance.

Re: What will happen during a war?

I see the armchair generals and strategists are out in force.

What use is F35 you ask? Who knows. It's impossible to know. We ordered some of the things about 5 years ago, having been putting money into the project for another 5-10 years before that, and we're not getting all the planes we ordered for another 5-10 years. Once we've got them, we may well buy more, when the price has come down a bit. Or not.

But the important point is that we'll be operating the things until 2040-2060. What will be the global security environment in 20-40 years time? Anyone? Anyone?

However at the moment we're using the RAF to fight ISIS, plus we've recently used it in Libya. And there's now a considerable body of thought that says we should have used it against Syria's chemical weapons capability in 2013 (where stealth might actually have been useful), though opinions differ obviously.

But the other big job the RAF are currently doing is patrolling the skies over the Baltic States. Because we're treaty-bound to defend them via NATO. But it's considered better to have forces in place to deter Russia, than to try to retake the places after they've fallen.

I don't think anyone is currently suggesting there's any threat to the UK itself. Other than from France of course. We've got to be prepared to fight off the Frogs...

But the point is Russia currently have form in invading their neighbours in order to "protect" Russian minorities left over from Soviet days. And that population is a running sore in Baltic States politicsj - particularly the older generation who only speak Russian and have a bit of nostalgia for the "good old days". So if we're going to have those countries in NATO we need a credible force in place,so Russia can't just conquer them in a day. Because if they have to mobilise sufficient force to do it, we've got time to react and reinforce ourselves.

But also the Russians know they've got to kill lots of British, US, German servicement to do it. Which then means other NATO governments have no excuse to just shrug their shoulders, up sanctions a bit and do the old Yes Minister "there's nothing we can do" bit.

The nuclear threat isn't credible if you're going from a standing start to WWIII. And realistically we're not going to re-invade somewhere on Russia's border once lost. The so the answer is credible military force in place (while not being big enough to actually threaten Russia), with reinforcement possible, backed by the nuclear deterrent.

Of course we could just have stuck with our old planes, but Tornado is getting old. And also, while you can fly old planes, and then buy new off-the-shelf ones to meet a threat quite quickly. Maybe 2 or 3 years to retrain pilots and start getting the new ones (even quicker if you buy second-hand like Canada buying old Aussie F18s). You can't do that with a carrier capability. Which as a trading nation on an island that imports food, oil and goods - is something quite useful. As well as for power projection.

To get a carrier designed and built and takes years. You've then got to train a crew to run it safely. Then train the pilots and buy the planes. Even in a rush and buying off-the-shelf designs you'd struggle to get an operational carrier within a decade. That's why the Russians had so much trouble with sending theirs to Syria - because even not regularly using it means you can't operate it properly. Carrier ops are hard. Complex, dangerous and expensive.

Re: Do it right (maybe NSFW)

I believe that Henry VIII did it even more properly. See this pic from the Tower of London.

But surely getting into bed couteracts this effect? So as long as you equalise the number of times you climb into and out of bed in your lifetime, everything should be fine.

This also applies to the number of times you fall on the floor while drunk. Again there shouldn't be a problem equalising this with the number of times you get up again, but I think that means you need to stand up, and not just crawl into bed, after hitting the floor.

Re: Sounds like a fairly volatile place to be at the time..

Erosion.

Wrong.

The sea is salty because the Flying Spaghetti Monster used them to boil his pasta, back when the earth was still hot enough to do that. He (she/it) then used the Moon as a collander to strain the pasta, which is why the moon has all those craters and holes in it. Which have since been occupied by Clangers of course.

History does not record what sauce the great FSM had with this pasta. But I'm sure it would be a boon to any potential space exploration if we could find a carbonara planet.

Re: "It won't"

Milton,

It's a long old rant. And fair enough to have a go at Canada's procurement, since they seem to have been in and out of the F35 program as if they're doing the hokey-cokey...

But why are you complaining about F35Bs and the lift fan? As far as I understand it, Canada were planning to buy the F35A (normal airforce version) but with a modification by borrowing the refueling system from the F35C (US carrier version). Or something. They were never involved in the VSTOL 'B' version, so far as I know.

And now may not be involved in any version. Having bought some old Australian F18s to tide them over as their old ones slowly fail while they have another go at making the decision. So Canada may go for F35A, or something else. Who can tell?

Re: Carriers??

Yes. But they tend to fly near to this floating airbase full of helicopters. And they tend to come at least in pairs, so there's someone with them who knows where they are to vector in the search-and-rescue boys.

Sea Harrier was also single engine.

I believe the US have been more picky about this in the past, until selecting the F35C. However this may be because modern engines are a lot more reliable.

Re: Remember the war

Voland's right hand,

Your question can be answered in one word. Training.

We have Voyager tankers for a reason. To allow our aircraft to be based a long way from where we want to use them. This capability can only be used if the pilots train for it. Regularly. I'm sure the paperwork to fly the long way round is incredibly easy to do. But these aircraft will need to do long ferry flights, so they'll train for it. The reason they'll need to do this is that they're going to mostly live with the RAF, with only 2 squadrons on a carrier. Until they need more, at which point I'm sure they'll fly them out from Blighty. Hence this is training for that kind of long deployment which is a vital operational requirement mandated by us buying a joint pool of F35B for both RAF and Navy.

Re: Carriers??

Also the carrier deck crew may not yet be certified for fixed-wing aviation. I don't know what stage the commissioning is at yet, but the plan was sea trials for the carrier, then work-ups with helicopters with plane operations only after that. And I presume they'll start with just a few planes, then work up to a squadron etc.

This is not something you rush, unless there's urgent reason to. Bit like ferrying planes across the Atlantic really. In wartime they'd fly anyway, in peacetime, they won't.

Re: Would-be lunar tourists should probably unpack

Do you need the Falcon Heavy to swing past the Moon? I'm sure you don't have the fuel to get into lunar orbit, but is it possible to have a nice eccentric Earth orbit that goes round the Moon?

Elon Musk shouldn't name his barges after Iain M Banks ships though. He should go for Douglas Adams gags instead. As Adams, like Musk, loves deadlines. And the whooshing sound they make as they go past...

Not that I'm having a go, SpaceX has so far achieved things it promised. Just a few years late. I don't know when Dragon 2 will fly, but I'd not be surprised if they still beat Boeing. And BFR is due for 2019 I think, but I'd be amazed if that even comes close.

What? Printers sometimes work? Lies! It's lies I tell you!

Re: Food snobs...

The food snobs might be arses. But varying degrees of food effort, taste, healthiness and presentation are necessary. I paid £70 two weeks ago for scallops followed by beef wellington. Best not think about the drinks bill... The food was excellent and beautifully presented. The service was superb. That was a posh, expensive place in London for my brother's 50th. Last weekend I had friends over who needed feeding, and I knocked up a ragu in 15 minutes that kept us all nicely fed, with a bit of pasta. All from fresh ingredients, but very little effort. This week I ate a Greggs sausage roll for lunch, because it was nice. In a couple of weeks I'll spend many hours in the kitchen prepping a family meal, because it's nice to have nice things - and there'll be some poncing around making it all pretty.

All these things are good. In their time. It's horses for courses. Main courses if I have my way, it's delicious.