Last year I wrote about my moving to New Hampshire. I would like to provide an update to interested parties.
I have heard some criticism of the free state project, mostly from people who don't live in New Hampshire. I was chatting with a friend when I was surprised to hear that a person who moved for the project was disappointed and was moving away. I joked with my friend: "was he not having fun?" We struggle for liberty in New Hampshire, we win, we loose, but we also have fun.
There are many aspects to the freedom and fun that we enjoy in New Hampshire: 1) Social 2) Agora 3) Political 4) Edification. Now you might not consider the political fun, but we have all types.
The social aspects of the project are absolutely wonderful. You meet some of the most dedicated folks. There is an amazing feedback loop. Your friends encourage you when you do good activism, and in turn spurs more activism. Ideas are tossed around, and good ones find support. In another post I'll give an example of the Manchester Freedom league, and how different people have spurred this idea at different times. People who have the respect of the community have a lot of resources in their friends.
With the strong friendships comes the agora. The agora refers to exchanging goods or services without the government being involved. This means no permits and no taxes. Ignoring the drug trade, the gross product of the free state agora is probably in the tens of thousands of dollars. We're on the cusp of being able to support full-time employees. A funny thing about the agora is that we have to teach each other how to be free. The state really kills creative thought, and together we spur each others' creativity.
The political activism has been slow to show rewards, but they do come. One clear victory that can be sited is the reduction of the state budget. The state budget that passed is $700 million smaller than last year. Seven hundred million in absolute terms, not a cut to some projection that can be manipulated. This represents a cut of six to seven percent. The payouts of this move will be in the years to come. There were also other victories which help change the environment in New Hampshire. Change the environment so that it is even more friendly to liberty in the future. If all successes were listed here, this article would be nothing but successes.
Edification has also been big in my life. Moving to New Hampshire has expanded my freedom. This yields the question: what will I do with this freedom? I plan to make my life better so that I can be the best person I can be. Freedom removes any excuse I may have not to be my best.
Friday, September 9, 2011
Tuesday, September 6, 2011
Race to the bottom
You may have heard or read about conditions being right for another step in the degradation of fiat currency. It has been a tale that has been told many times before. That is the tale of hyperinflation. Hyperinflation is something which has happened too many times in the past. You may have heard about Germany during the Weimar republic, or the phrase "not worth a continental" which was a bit closer to my home.
It would not be surprising to me if the fate of the US dollar will be the same as so many other currencies of the past. I have thought this for a while, but was still surprised to hear about the "race to the bottom" idea. This idea is that many countries will try to keep the exchange rate of their currency low so that exports appear cheaper and imports more expensive. I must say that I originally thought that this idea would not come to fruition. Now, I'm not so sure.
Today, after study, we are faced with the fact that there is evidence for this race to the bottom hypothesis. Over the past few months the bank of Japan has intervened to weaken its currency. Switzerland has also lowered interest rates. Today, we read about the Swiss central bank announcing that they will effectively devalue their currency and peg it to the Euro. A result of this intervention is a 7% drop in the value of the Swiss Franc verses gold, and a 9% drop verses the US dollar. I view this as evidence of the ongoing race to the bottom.
The results of this move will be good for the Euro in the short term. The value of the Euro will be supported by this new demand from Switzerland. Long term, the issue is much different. Over time, as the Euro experiences new trouble, so will the Swiss Franc. This move will make it so the Franc and the Euro act as if they were the same currency, and as such, a collapse of one will lead to a collapse of the other. The European Central Bank will depend on the support from Switzerland, and not address the structural difficulties it faces.
The Swiss Franc has been a pillar of stability for quite some time. Today, that has changed. Perhaps the Chinese Yuan may step up to the plate, in effect become the new Swiss franc. Alas, this will not happen as long as the Yuan is pegged to the dollar. It seems that people who wish to preserve their purchasing power are left with only one option, commodities.
It would not be surprising to me if the fate of the US dollar will be the same as so many other currencies of the past. I have thought this for a while, but was still surprised to hear about the "race to the bottom" idea. This idea is that many countries will try to keep the exchange rate of their currency low so that exports appear cheaper and imports more expensive. I must say that I originally thought that this idea would not come to fruition. Now, I'm not so sure.
Today, after study, we are faced with the fact that there is evidence for this race to the bottom hypothesis. Over the past few months the bank of Japan has intervened to weaken its currency. Switzerland has also lowered interest rates. Today, we read about the Swiss central bank announcing that they will effectively devalue their currency and peg it to the Euro. A result of this intervention is a 7% drop in the value of the Swiss Franc verses gold, and a 9% drop verses the US dollar. I view this as evidence of the ongoing race to the bottom.
The results of this move will be good for the Euro in the short term. The value of the Euro will be supported by this new demand from Switzerland. Long term, the issue is much different. Over time, as the Euro experiences new trouble, so will the Swiss Franc. This move will make it so the Franc and the Euro act as if they were the same currency, and as such, a collapse of one will lead to a collapse of the other. The European Central Bank will depend on the support from Switzerland, and not address the structural difficulties it faces.
The Swiss Franc has been a pillar of stability for quite some time. Today, that has changed. Perhaps the Chinese Yuan may step up to the plate, in effect become the new Swiss franc. Alas, this will not happen as long as the Yuan is pegged to the dollar. It seems that people who wish to preserve their purchasing power are left with only one option, commodities.
Monday, September 5, 2011
Cut it out!
A quick search on Google yields two dates for Ron Paul marches on DC. One on October 8, 2011, and another on March 3 2012. There is also a link to a site revolution march which is defunct. Please stop it.
In the quest for more freedom, people have taken their eyes off the prize and diverted resources away from more productive tasks. It is like some people think that someone should do something and they get all starry eyed and fantasize about a big something to do. There are four reasons why marches on DC for Ron Paul should be avoided: 1) Cost 2) Benefit 3) Principle 4) Mixed signals.
The first thing that should be thought about when considering a march on DC is the cost. There are not just the costs of a stage, bathroom facilities, speakers, advertising, etc. These costs alone should run in the thousands if not tens of thousands if done right. There are also the costs of the attendees. Imagine the costs to the attendees. If the event has moderate attendance of one hundred thousand, and we use a low ball estimate of $300 average travel, hotel, food expense per person, then that is $30 Million. Again, that's thirty million dollars! What could be accomplished with thirty million dollars? What could 100,000 Ron Paul volunteers each with $300 do for Ron Paul? This cost is tremendous and must be considered before any decision on action.
We should also consider the benefit. Do marches achieve their goals? What was the result of the marches for peace during the Bush presidency. Did Farrakhan's million man march accomplish anything. What about Glenn Beck, who was mocked by Steven Colbert? With the exception of Martin Luther King, it's difficult to identify a march that achieved its purpose. Why Washington DC? People remember a protest at Kent State, more readily than other DC protests. The benefit of DC marches is dubious at best.
If one has the goal of empowering individuals and protecting them from DC. Then Marches on DC are actually detrimental to that viewpoint. A march on DC brings attention to the federal government. Bringing attention to DC is suggesting that the federal government solve problems, not the states or individuals. It distracts people from the local successes of liberty, and draws their attention to the federal negation of it. At least in New Hampshire liberty has been far more successful at the state and city/town level. A march on DC is against the principle of personal empowerment.
A Ron Paul march on DC also sends mixed signals. A president is elected by voters, not DC. Marching on DC for Ron Paul, seems to suggest that the government should elect Ron Paul. Are Ron Paul supporters trying to circumvent the election? Is the government preventing Ron Paul form running? Why are people going to the government and not inspiring their friends and neighbors to vote for Ron Paul. Why not a Ron Paul t-shirt, or button day that does not require tremendous resources.
Another consideration is the risk of such an event. A poorly attended march on DC may suggest low support for Ron Paul. It was actually suggested to me by an acquaintance that if there is poor attendance at this October 8th event then I will be contributing to the detractors of Ron Paul. No I won't. If this event on October 8th is a flop, it means it was a bad idea and/or planed poorly. No one's idea of action will ever obligate me.
In the quest for more freedom, people have taken their eyes off the prize and diverted resources away from more productive tasks. It is like some people think that someone should do something and they get all starry eyed and fantasize about a big something to do. There are four reasons why marches on DC for Ron Paul should be avoided: 1) Cost 2) Benefit 3) Principle 4) Mixed signals.
The first thing that should be thought about when considering a march on DC is the cost. There are not just the costs of a stage, bathroom facilities, speakers, advertising, etc. These costs alone should run in the thousands if not tens of thousands if done right. There are also the costs of the attendees. Imagine the costs to the attendees. If the event has moderate attendance of one hundred thousand, and we use a low ball estimate of $300 average travel, hotel, food expense per person, then that is $30 Million. Again, that's thirty million dollars! What could be accomplished with thirty million dollars? What could 100,000 Ron Paul volunteers each with $300 do for Ron Paul? This cost is tremendous and must be considered before any decision on action.
We should also consider the benefit. Do marches achieve their goals? What was the result of the marches for peace during the Bush presidency. Did Farrakhan's million man march accomplish anything. What about Glenn Beck, who was mocked by Steven Colbert? With the exception of Martin Luther King, it's difficult to identify a march that achieved its purpose. Why Washington DC? People remember a protest at Kent State, more readily than other DC protests. The benefit of DC marches is dubious at best.
If one has the goal of empowering individuals and protecting them from DC. Then Marches on DC are actually detrimental to that viewpoint. A march on DC brings attention to the federal government. Bringing attention to DC is suggesting that the federal government solve problems, not the states or individuals. It distracts people from the local successes of liberty, and draws their attention to the federal negation of it. At least in New Hampshire liberty has been far more successful at the state and city/town level. A march on DC is against the principle of personal empowerment.
A Ron Paul march on DC also sends mixed signals. A president is elected by voters, not DC. Marching on DC for Ron Paul, seems to suggest that the government should elect Ron Paul. Are Ron Paul supporters trying to circumvent the election? Is the government preventing Ron Paul form running? Why are people going to the government and not inspiring their friends and neighbors to vote for Ron Paul. Why not a Ron Paul t-shirt, or button day that does not require tremendous resources.
Another consideration is the risk of such an event. A poorly attended march on DC may suggest low support for Ron Paul. It was actually suggested to me by an acquaintance that if there is poor attendance at this October 8th event then I will be contributing to the detractors of Ron Paul. No I won't. If this event on October 8th is a flop, it means it was a bad idea and/or planed poorly. No one's idea of action will ever obligate me.
Sunday, May 8, 2011
Bitcoin Price Deflation
Deflation in the bitcoin economy has been significant in the last month. Prices of goods and services have halved almost across the board. The rapidly changing price of bitcoin has led to challenges for merchants. It has also paved the way for profit for early adopters. We will discuss steps that merchants and customers can take to minimize their risk due to currency exposure.
Merchants who accept bitcoin are in a predicament. If they set a bitcoin price it tends to be out of date within a day or two. The dollar price of the good or service becomes so high so fast that people won't want to buy the product. At the same time merchants are worried about a sudden drop in the price of bitcoin back to former levels, which makes it difficult to lower the price to make up for the increased traditional currency price of bitcoin. These same issues cause problems on the buyer's side.
One way to guard against the rise in the price of bitcoin is to keep some on hand. This goes for merchants as well as consumers. If merchants hold on to bitcoins they accepted as $1 for goods, then they have hedged against a rise in price to $2, and confidently lower their prices guarded against a fall in the price of bitcoin to previous levels. Also consumers that know that they will want to buy products for bitcoins in the future can buy them early also guarding against a rise in the price in the future.
The good news is that as the market cap increases one should expect the percentage change of the price of bitcoin to be less dramatic. If all of a sudden someone decides to spend $100 on bitcoin then they can only buy around 27 bitcoins today while that may have bought 125 bitcoins a month ago. A rising price in bitcoins means that any individual will have less of an effect on the price of bitcoins with any given purchase. This past month we have seen the market cap grow from $5 million to $22 million. Without a dramatic flux in the amount of new users we should see the price be a bit more stable. There is speculation that on Monday night when the difficulty increases there will be a small rise in traditional currency price of bitcoin.
Merchants who accept bitcoin are in a predicament. If they set a bitcoin price it tends to be out of date within a day or two. The dollar price of the good or service becomes so high so fast that people won't want to buy the product. At the same time merchants are worried about a sudden drop in the price of bitcoin back to former levels, which makes it difficult to lower the price to make up for the increased traditional currency price of bitcoin. These same issues cause problems on the buyer's side.
One way to guard against the rise in the price of bitcoin is to keep some on hand. This goes for merchants as well as consumers. If merchants hold on to bitcoins they accepted as $1 for goods, then they have hedged against a rise in price to $2, and confidently lower their prices guarded against a fall in the price of bitcoin to previous levels. Also consumers that know that they will want to buy products for bitcoins in the future can buy them early also guarding against a rise in the price in the future.
The good news is that as the market cap increases one should expect the percentage change of the price of bitcoin to be less dramatic. If all of a sudden someone decides to spend $100 on bitcoin then they can only buy around 27 bitcoins today while that may have bought 125 bitcoins a month ago. A rising price in bitcoins means that any individual will have less of an effect on the price of bitcoins with any given purchase. This past month we have seen the market cap grow from $5 million to $22 million. Without a dramatic flux in the amount of new users we should see the price be a bit more stable. There is speculation that on Monday night when the difficulty increases there will be a small rise in traditional currency price of bitcoin.
Thursday, April 28, 2011
Rebuttal of Timothy B Lee
This post is in response to Timothy Lee's article "The bitcoin bubble." In this article Lee argues that the rising price of bitcoin is temporary and a fad. I wish to point out some wrong assumptions, logical fallacies, and omissions that his article makes.
In his article Lee is restrictive in his thinking. His article mainly mentions dollars as a competing currency. He fails to address bitcoins which trade for euros, rubles, or British pounds. Bitcoins know no borders and they may be more useful in one country than another. Lee fails to consider these facts. This point is most clear when he argues that bitcoins will never replace dollars. This is a straw man argument as no one has suggested that bitcoin will replace traditional currencies. All that has been shown is that bitcoin replaces dollars or other currencies in some cases. Bitcoin proponents may suggest that these cases will grow as bitcoin gets more exposure.
Lee puts up another straw man when he argues that there will always be demand for dollars because taxes will require dollars. This assertion is true, but it gives the reader the false impression that bitcoins are to replace dollars. Lee also fails to acknowledge that bitcoins are attractive to people who do not wish to support wars of their governments. Lee also fails to acknowledge that the fact that bitcoin transactions will be difficult to tax actually is an advantage of bitcoin.
It is curious that Lee refers to bitcoins as ones and zero's in a database, after quoting a description of bitcoin that refers to it as peer to peer and thus not dependent on a central data base. It's strange that such a discrepancy is made in the article. He complains that people who exchange bitcoin will have to do extra math. He fails to recognize that there are people who like math. He also suggests that risk will keep people away. If this were true there would be no stock market. Every one would buy gold for an investment, an investment with less risk that traditional currencies. He argues that people will have to cash in bitcoins to make traditional purchases. This ignores the fact that people can hold both currencies and use whichever is most convenient and/or profitable.
The most glaring glossing over in his article is his discussion of the drug trade and illicit markets. It is not hard to find where drugs are being sold for prices only quoted only in bitcoin. As drugs are illegal in many countries their supply can be limited in certain areas of the world. This results in high prices that are paid for drugs, and will create background demand for bitcoins. Specifically, an eighth of an ounce of high quality marijuana sold for 40 BTC at the time of Lee's article. Now, the same product sells for 20 BTC. We are witnessing a feedback loop. Hard to obtain products offered for bitcoin, value of bitcoin goes up. Value of bitcoin goes up, bitcoin price of hard to obtain product goes down. Bitcoin price of hard to obtain product goes down, value of bitcoin goes up. This process can repeat indefinitely, as the bitcoin market cap increases the upward swings should become less dramatic.
Bitcoins do have a certain utility that other currencies do not offer. This utility may not appeal to everyone, but it will appeal to some. As it does appeal to some people, the utility of bitcoins will increase. This will encourage others to participate. While bitcoins may never be a world currency, they are used by some, and as such are already a success.
In his article Lee is restrictive in his thinking. His article mainly mentions dollars as a competing currency. He fails to address bitcoins which trade for euros, rubles, or British pounds. Bitcoins know no borders and they may be more useful in one country than another. Lee fails to consider these facts. This point is most clear when he argues that bitcoins will never replace dollars. This is a straw man argument as no one has suggested that bitcoin will replace traditional currencies. All that has been shown is that bitcoin replaces dollars or other currencies in some cases. Bitcoin proponents may suggest that these cases will grow as bitcoin gets more exposure.
Lee puts up another straw man when he argues that there will always be demand for dollars because taxes will require dollars. This assertion is true, but it gives the reader the false impression that bitcoins are to replace dollars. Lee also fails to acknowledge that bitcoins are attractive to people who do not wish to support wars of their governments. Lee also fails to acknowledge that the fact that bitcoin transactions will be difficult to tax actually is an advantage of bitcoin.
It is curious that Lee refers to bitcoins as ones and zero's in a database, after quoting a description of bitcoin that refers to it as peer to peer and thus not dependent on a central data base. It's strange that such a discrepancy is made in the article. He complains that people who exchange bitcoin will have to do extra math. He fails to recognize that there are people who like math. He also suggests that risk will keep people away. If this were true there would be no stock market. Every one would buy gold for an investment, an investment with less risk that traditional currencies. He argues that people will have to cash in bitcoins to make traditional purchases. This ignores the fact that people can hold both currencies and use whichever is most convenient and/or profitable.
The most glaring glossing over in his article is his discussion of the drug trade and illicit markets. It is not hard to find where drugs are being sold for prices only quoted only in bitcoin. As drugs are illegal in many countries their supply can be limited in certain areas of the world. This results in high prices that are paid for drugs, and will create background demand for bitcoins. Specifically, an eighth of an ounce of high quality marijuana sold for 40 BTC at the time of Lee's article. Now, the same product sells for 20 BTC. We are witnessing a feedback loop. Hard to obtain products offered for bitcoin, value of bitcoin goes up. Value of bitcoin goes up, bitcoin price of hard to obtain product goes down. Bitcoin price of hard to obtain product goes down, value of bitcoin goes up. This process can repeat indefinitely, as the bitcoin market cap increases the upward swings should become less dramatic.
Bitcoins do have a certain utility that other currencies do not offer. This utility may not appeal to everyone, but it will appeal to some. As it does appeal to some people, the utility of bitcoins will increase. This will encourage others to participate. While bitcoins may never be a world currency, they are used by some, and as such are already a success.
Tuesday, January 18, 2011
Family Travels
I was very apprehensive to leave a little pocket of libertarian heaven that we've created here in New Hampshire. A desire to see my family tore me away. Not willing to submit to anyone commanding me to remove my belt or shoes I felt that holiday travels to my family would be impossible.
Luckily I thought of a solution, the train. Now I cursed the radio when I heard that random TSA style checkpoints were set up at a train stations. Having already bought my ticket I crossed my fingers and hopped aboard. My silent goal of traveling across country without being threatened. Now, near the end of my travels I felt that I have achieved my goal.
Don't get me wrong, coach on a train is not the lap of luxury. The train does take longer, and visits some train stations only at inconvenient hours. However, the seats are bigger, and there is a lounge car; you can stretch your legs.
In fact I am convinced that this is the only way for a libertarian to travel. The food is expensive, but you can bring your own. The ticket says that I must have I.D., but I haven't been asked to show one. In a world of X-ray scanners, I didn't pass through a medal detector. The spontaneous order that libertarians appreciate so much was even on display as everyone was invited to the lounge car to play instruments and sing. Here I am sharing time with humans, being treated as a human. Nice to know that it is still possible. In a world where fliers are treated like livestock, the human spirit can (and will) proceed unhampered.
Alas, this libertarian joy was squashed. It was a morning in Buffalo when I noticed an armed man on the train. He wore a outfit that was a drab green, the color of a tree when sick. He had a patch on his shoulder that said something like border safety officer. I thought it was strange, the train hasn't crossed any borders. There was no national border that I was crossing.
I put it out of my mind because I didn't see him bother anyone. I mainly thought about the waste of money. Come to find out the passenger in front of me was awakened in the middle of the night, and asked if he was an American citizen. I thought about what would happen if that were me. What If I just kept my mouth shut. Would the armed man claim that I was disturbing the peace while he disturbed my peace.
What do these armed men do to people who remain silent?
Luckily I thought of a solution, the train. Now I cursed the radio when I heard that random TSA style checkpoints were set up at a train stations. Having already bought my ticket I crossed my fingers and hopped aboard. My silent goal of traveling across country without being threatened. Now, near the end of my travels I felt that I have achieved my goal.
Don't get me wrong, coach on a train is not the lap of luxury. The train does take longer, and visits some train stations only at inconvenient hours. However, the seats are bigger, and there is a lounge car; you can stretch your legs.
In fact I am convinced that this is the only way for a libertarian to travel. The food is expensive, but you can bring your own. The ticket says that I must have I.D., but I haven't been asked to show one. In a world of X-ray scanners, I didn't pass through a medal detector. The spontaneous order that libertarians appreciate so much was even on display as everyone was invited to the lounge car to play instruments and sing. Here I am sharing time with humans, being treated as a human. Nice to know that it is still possible. In a world where fliers are treated like livestock, the human spirit can (and will) proceed unhampered.
Alas, this libertarian joy was squashed. It was a morning in Buffalo when I noticed an armed man on the train. He wore a outfit that was a drab green, the color of a tree when sick. He had a patch on his shoulder that said something like border safety officer. I thought it was strange, the train hasn't crossed any borders. There was no national border that I was crossing.
I put it out of my mind because I didn't see him bother anyone. I mainly thought about the waste of money. Come to find out the passenger in front of me was awakened in the middle of the night, and asked if he was an American citizen. I thought about what would happen if that were me. What If I just kept my mouth shut. Would the armed man claim that I was disturbing the peace while he disturbed my peace.
What do these armed men do to people who remain silent?
Friday, July 16, 2010
Traffic light god: video performance
Daniel Tobas preforms "traffic light god" at the 2010 porcupine freedom festival.
Special thanks to Muhammad for the video expertise.
Special thanks to Muhammad for the video expertise.
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