Thursday, July 23, 2015

Does banker bot care about free banking?

George Selgin is the expert on free banking. He quotes the amateur:
Like certain weeds and infectious diseases, some myths about banking seem beyond human powers of eradication.
I was reminded of this recently by a Facebook correspondent’s reply to my recent post on “Hayek and Free Banking.” “We had free banking in the US from 1830 until 1862,” he wrote. “It didn't work out too well.” “During the Wildcat Era,” he added, “banks were unregulated and failed by the hundreds.”
And then goes through a bit of banking history.

How does bot handle government manipulation?

The bot obtains prices for government regulations, and maintains a fairly measured probability distribution of those prices.  Humans affected by regulations can make fair counter bets, and this makes the current regulatory environment somewhat redundant free. the inefficiency is partially removed by controlled side effects. Bots gather inside information about regulatory cost.  Banker bot simply tells you the most likely event based on fair probability measures. Its major concern is generating accurate colors on the smart card LED, making its owner much smarter.  So it makes no moral judgement about regulations.


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