Was the Boston Tea Party justified?

The Boston Tea Party was a political and mercantile protest by the Sons of Liberty in Boston, Massachusetts, on December 16, 1773.[1] The target was the Tea Act of May 10, 1773, which allowed the British East India Companyto sell tea from China in American colonies without paying taxes apart from those imposed by the Townshend Acts. American Patriots strongly opposed the taxes in the Townshend Act as a violation of their rights. Demonstrators, some disguised as Native Americans, destroyed an entire shipment of tea sent by the East India Company.

From then on Americans drank coffee.   I leave it to the philosophers. 

I hate my state contest

 

Courtesy ZH.

California takes seventh place.Kansas sticks out, North Dakota lost the shale business.  The top three are all the North East big ones, except Pennsylvania.  The worst ones all burdened with huge pension debt.

The score is a proxy for a stuck government, no liquidity left for small budget items. So voters see a disutility in local government. This comes with a rush to the suburbs for higher incomes.  Nightmarish stuff for election time.

Bank business

 From he point of view of the banking industry,the New Fed is a cost and benefit.  

The benefits of a free Fed under Due Process means a big expansion of the Swift market, but a currency competitive world. Existing banks will do well adapting their ATM and S/L systems using new tech.  They will collect a lot of correspondent bank fees.  Their first in position does not last. But banking market size grows. We can enforce Due Process on he distribution of bearer cash. Insure the no collusion clause down to the instruction cache.  This is gold to a banker, a way to minimize risk and expand transactions.

Swift likely works great, a hierarchical trusted ledger. Forget Open Banking, make a Swift Light for the leaves of the system. The banks get digital limit and time controls. Hand held, safe Swift, what's not to like?

The claim is that Newsom is on board

The curriculum said among other things that “within Ethnic Studies, scholars are often very critical of the system of capitalism as research has shown that Native people and people of color are disproportionately exploited within the system.”

Mish has the story, this is full blown Calizuela, the New Franciscan Bible.   This is also your standard failed Hispanic state.   This is exactly what will kill Biden's chances. This is why Calizuela is a boat anchor.  In the Constitution we called them 'Other people' at least leaving it to the imagination.  We are back to ante bellum, counting some people partly.

We are not a smart state, not a state this size, and we foul things up for the rest of the nation quite often.  This is like someone guided Biden straight down manure path, he is now waist deep in it.  Biden is a toddler, his personality.

Small state governors

 That is the key to stabilizing this beast, and we should be willing to pay them 3 billion each per year for the job.

Small state governors guarantee that Treasury will keep the default rate at 2%, and the Fed just breaks completely for 15 years, as a non profit.  Balance the states with liquidity, and they can pause and reflect, mostly on Swamp efficiency.  Sort of build the interior sect in their own parties. A sensible cash speaks, the senate is half, pay the price, no one is to blame. If we had to move Harvard to Wyoming, it is still worth it.

O ring theory in economics

 q_H² + q_L² ≥ 2q_Hq_L

Michael Kremer

OK, it is a Markov 2 tuple. Got me thinking.


Consider a process that produces one (or more) products. The more part is going to be partition, consider one product.   That product is a unit variance. It is the thing with the least random noise. Against that are two types of  skilled action to produce one of these.

You know where I am going.  The factory is a color operator, keeping spin maximally separated and carrying a finite color error.  A Markov 3 tuple system.  There is finite bandwidth, it needs be filled without over running the error bounds, which is two products crashing.  This is the standard S/L model, also a production function. But this is just a node, one distinct energy level, and the economy is a superposition of nodes, but not that many.

In econometrics we would search for finite and almost bound delivery systems, unto themselves. Then we can compare energy levels fairly, wealth, with a simple composition of a few low N forms, mostly unstable even. But it becomes a probability distribution as a result, a histogram, much better than a sigma bounding. That is, you find the factorings of different sectors that are or are not out of scale.

Laura discovers our regularly scheduled recession

America’s Dual Recession

Yes, Laura Tyson, we have recessions on a scheduled basis. And your background says you did some of the scheduling.

The Kamala effect

Republicans see California as perfect foil as fall campaign begins

After defining California last week as a “land of discarded heroin needles,’’ rolling blackouts, voter fraud and sanctuary cities during their national convention, Republicans this week made clear they intend to make the blue state a prime campaign foil this fall.


Political strategists expect the pile-on to continue all the way to Nov. 3 because California crystallizes a messaging strategy that is likely to work for both President Donald Trump — and his party.

"The image we hear of California portrayed by a lot of speakers is exactly the kind of image that does appeal to base voters," said GOP strategist Lanhee Chen, who advised presidential candidates Mitt Romney and Marco Rubio. “I do think it mobilizes them. I do think it’s an effective way of framing the contrast difference between Biden and socialism and Trump and free enterprise.’’

Cartel Kamala and the Calizuela unions.  If Biden did not know this was coming then he is unqualified.

Calling horse manure on National Review

A Missed Opportunity at the Fed

 

If it chose another course, the Fed could minimize that danger while also doing more to enhance its ability to fight recessions. Targeting spending throughout the economy, so that it grows at a steady 4 percent rate, would allow inflation to go up and down in response to trends in productivity while sticking to the 2 percent average. It would generate lower inflation during a boom, which is when it’s most desirable. The Fed should also abandon its post-2008 policy of paying banks interest on excess reserves, which has unduly complicated its ability to hit any target. (It’s one reason there has had to be so much quantitative easing for so little payoff: Banks have been discouraged from lending out the new money.)

We shall examine the chart since the editors of the national Review are too stupid to read a chart. 

Look carefully.  The excess reserves basically follow the Fed treasury purchases. The treasury purchases are needed to tax the banks, as the government is basically broke. So the banks respond with excess reserves because they want to avoid the tax collecting job as much as possible.

The editorial is almost entirely driven by National Review being a bunch of damned welfare bums who want their special interest funded at the expense of the middle class.  The National Review crowd are the same bunch of welfare bums we find among the California unions, robbing the poor and middle class.

Even Kevin Drum gets very tiny clues:

Like most taxes, tariffs on goods and services get passed along to consumers in the form of higher prices.

Kevin will soon apply this to the Fed tax collector. Except the taxes applied to the household are three time higher than the tariffs, at 150 billion.  So, right out of Kevin Drums head, we have one of the mis-educated students of Krugman relearning economics. He is actually connecting dots here.

Also note, in the graph.  During this last tax hike the regulated banks are surrendering, closing down and letting the tax fall through to whatever is left. So, we know who to blame, all the fools who failed at connecting the dots, failed the Lucas criteria.

 

Clarida is clueless

But wait there's more: Clarida also says that "a decision to tighten monetary policy based solely on a model without any other evidence of excessive cost-push pressure that puts the price-stability mandate at risk" - such as what happened the last time the Fed tightened "is difficult to justify, given the significant cost to the economy if the model turns out to be wrong and given the ability of monetary policy to respond if the model were eventually to turn out to be right."

There is a model, one which the economy does follow, just not the badly educated Fed.  The policy for currency banking is to make the market for liquidity in a S/L setting with bounded error.  

The only group that does not follow the model are the central bankers.  And that is what is causing economic cycles and inequality.  That is the reason each generation needs to default, the theoretical error needs correcting.  And foul theory is the reason we have Antificants. The foul theory needs to be mostly rooted out of central banking.

Fed taxes enumerated

 

Chart from here.

The gray bar is Fed taxes. Use the scale on the left in billions.  

We see this taxes went from 20 billion to 100 billion, and it will continue to rise, farther and faster if the slump ends.

The slump might no end. If the taxes go up much beyond 1250 billion, then we can kiss the Fed good bye.

The name for this is'Tax collection by regulated banks'. It is a direct tax on the middle class, it is causing the rebellion, a rebellion best classified as 'No taxation without representation'.  

It is actually a legal tax, and very regressive, yet Krugman, Yglesias and that whole crew still want more of it. Go figure? Why do we call them progressive?  At some point folks are going to figure this out. Then what will Krugman, Delong and Yglesias do for an excuse? Will they plead ignorance?  I am think they should be sued for fraud.

Nor is the effect of this tax a wild conspiracy theory.  Respectable economists are now doing studies on this, examining the deflationary impact, as in Japan. The Keynesians cannot hide for long. I think Krugman got booted from Princeton for perpetuating the fraud.

Yglesias does not understand tight and loose money

Yglesias: 

If you think low interest rates create problems (bubbles, inequality, whatever) the solution is to make the budget deficit bigger not tighter money from the Fed.

Money is tight.  Wealth is hoarding it. Banks are raising rates on consumers. The only exception is housing, and that is driven by a bubble in the escape from cities.

Yglesias mistakes Fed Taxes for low rates.  Rates are not low, Fed taxes are headed up, up to over a hundred billion and banks are closing down.  That is money is tight.

Yglesias was taught by the flat earthers, so he gets most of this wrong.   We are headed for very tight money, five years of tight money and deflation.

Yglesias did not get confused about this in the Harvard philosophy department.  This is strictly what he was taught in the last ten years by the Keynesians.  Sumner tends to agree, money is tight right now. Think of the thousands of students who were mis-educated by economic departments around our colleges, a disaster.

Here is tight money:

Note the drop in velocity means no longer have granular banking, retail banking for the middle class has become exteremely tight as the Fed increases taxes to cover the boneheads in banking who have no clue, Like Yglesias.

Note, the total collapse of velocity comes with the onset of Fed taxes.  It is coincident with the shrinking of the retail banking network.  The tight money was pushed by Bernanke, Krugman and Delong.  It all contributes to inequality, it is based on foul flat earth theory, like the stuff they teach Yglesias and Drum.

So much for Powell scaring us with inflation

Ultra-Rich Investor Group Panic Hoards Cash Ahead Of Potential Growth Scare

The Fed is making deflation.  Leaver your money on excess reserves as the regulated bankers are shutting down for the duration.  The investor group can go shadow banking against those reserves, move them in and out of non regulated accounts for trading.

Likely a biased poll, but the trend is correct.

DI Poll: Trump Leads Biden Nationally, Key Battlegrounds

A new poll predicts a landslide victory for President Donald Trump this November.

Trump leads Democratic presidential nominee Joe Biden by 3 percentage points in the latest Democracy Institute/Sunday Express poll 48%-45%, with pollsters predicting Trump will rout Biden in delegates, 309-229, as the president holds a lead over the former vice president in the swing states of Florida, Iowa, Michigan, Minnesota, Pennsylvania, and Wisconsin.

"Although Biden remains in a competitive race with Donald Trump, and may well do so until election day, his support isn't growing," said Democracy Institute director Patrick Basham, who believes Biden has already hit his "high watermark."


"And, tellingly, almost all of the issues that matter most to voters are trending in President Trump's favor."

And the cause?

 A campaign managed by California unions is not working.  Biden let himself get trapped.  However, 538, the better poll results, show Biden holding his lead.

We never undipped

 

The seasonal adjustment was way off. What we did was unnecessarily get the Keynesians excited.

Another one bites the dust

Italian economy shrank 12.8% in Q2, more than first thought

My current candidate

 

She is attentive, I think. I am not sure she can bring the two sides into a coalition.

Antificants and small states will get first grab at the money. Can you see it in her eyes? If so, then by all means write in:

Little Missie Poopoo Butt

as your choice for president.

How can the Treasury default smoothly?

 Seems a contradiction, the New Fed is independent under Due Process. But the Treasury defaults?

The New Fed is a lease, the Treasury can create money at 2% annual in return. So a residual power to buy bonds on the run and erase them, remains. If is a contract, enforced by the Supremes.  Treasury can just send the money, whatever, but the   The goal is to pack the defaults among the periods of deflation. The devaluations are variance bound, probably by 2%. Hence my guess is that we may hit a peak of 5% inflation within two years, but it won't last.

An independent Fed is forced to compete, with monopoly powers plus a burden.  The net is another 3% productivity gain, over all, we will be back to deflation in about five years. But there are diminishing returns, the 15 year renewal may not be as generous. I dunno.

Nixon used to taunt the anti-war crowd

Biden condemns Portland violence, says Trump 'recklessly encouraging' it

The Antificatns had a point, counter all the Alt-right kids. Nothing wrong with that. I keep telling them, as their chief economist, make the deal.   Money talks, and Antificants get the Right to Coin, lucky them.  Work a cash stream to the small states, under Due Process. Then move there and add IQ points.  Now is the time, deal with the small state, you know, the ones that suffer severe castration anxiety.

Home prices and mortgage rates

 

I have a hard time lining these up to fit any theory of rates and inflation.

If the economy is partitioned, not ergodic, then the 30 year mortgage rate lines up with 30 year home ownership. There should be a noticeable, ex post, relationship.  I have no theory, hmmm...

 There are a some confounders, local zoning rules, tenant regulations,  tax deductions and government mortgage insurance.  Local zoning rules make the sales cycle much longer. Government insurance means support for increasing home ownership.  Tenant regulations raise rental costs, pushing people into homes.  Then there is the bog tax deduction on interest payments.

It is not so much I have no theory, but the confounders are all significant making it nearly impossible to find congestion points in isolation.  Another government created nightmare might be the best theory. 

In the background are the interest charges dropping almost monotonically over the very long 40 year period. 

Look:

Home ownership rises to a peak, then drops. A six point variation over all.  Basically some 6% of families have been priced out of the market.  Price is going up mainly due to more amenities, it is the wealthiest who are buying homes. As the lower incomes drop out, the supply of cheap housing drops and amenities and wealth exaggerate the price inflation.  Wealthy are more liquid.

It matters, it matters because we want to know how partitioned we are, and how much of the inflation vs interest theories really work.

Housing starts:

Crashed in 2005 when the lower incomes got priced out of the market.  Barely recoverd, and home ownership is still dropping.

For the Antificants, it is a mess, and in the deal, they think it through. Do not sign off on any housing. until the default deal is signed.

Nancy is disguising the pension bailout, and everyone knows it.

Meadows blames Pelosi 'fantasy objection' for impasse on coronavirus relief talks

White House chief of staff Mark Meadows blamed stalled negotiations over the future of a second coronavirus relief package on a "fantasy objection" from Speaker Nancy Pelosi (D-Calif.), who he said would not explain what her version of a stimulus package would fund.

In an interview with NBC's "Meet the Press" on Sunday, Meadows attacked the House leader over her unwillingness to come down from a demand that Republicans support a $2.2 trillion bill for the second round of economic stimulus in response to the coronavirus pandemic.

Pelosi and House Democrats have noted that the offer is lower than their original plan for a second round of stimulus, the $3 trillion HEROES Act.

"I had a conversation with Speaker Pelosi. And even on her $2.2 trillion counter offer, she can't tell the American people, nor me, what is in that," Meadows said.

"She puts forth a number, suggests that she came down, and yet she's willing to turn down $1.3 trillion of help that goes to the American people because she would rather them have nothing than to give way on what ... her fantasy objection might be," he continued."

He went on to suggest that Pelosi claimed she would "fill in the blanks" during a conversation between the two when Meadows asked what the $2.2 trillion counter-offer would fund compared to the $1 trillion Heals Act, which Senate Republicans have proposed.

The risk is more taxes

 The Price of the Fed’s New Policy

The central bank wants to maximize employment and lift inflation, and it’s willing to ignore the trade-off. The risk is asset inflation and financial imbalances that may end in a crash.

Asset inflation, if you like. But mostly a heavy ten year burden of Fed taxes, mostly for the purpose of waiting for pensions to stabilize in California, pretty much like last time.

There is an underlying risk. Facebook, Apple or Amazon needs a banking sector and the federal government is bankrupting the regulated banks. Big tech has the money to create a universal shadow banking system.

Say what?

Colleges With Covid Outbreaks Advised to Keep Students on Campus

 A consensus is building among public health experts that it’s better to keep university students on campus after a Covid-19 outbreak rather than send them home as many are doing.

It’s easier to isolate sick or exposed students and trace their contacts if they stay put, said Ravina Kullar, epidemiologist and spokesperson for Infectious Diseases Society of America. Sending students home risks exposing other people there as well as along the way, and makes contact tracing all but impossible.

“There’s just inevitably going to be an outbreak,” she said. “Colleges need to take on the burden of having these students kept at their campus and taking care of them.”

Good grief. 

Iraq is not longer sovereign

Saudi Troops Join U.S. Base In Oil-Rich Northern Syria

Twenty Saudi soldiers arrived this week at a U.S. military base close to an oilfield in northeastern Syria, according to Iranian media, which cite a report from a Lebanon-based Arabic-language TV channel.

At the end of last year, Saudi troops were also reportedly stationed near Syria’s largest oilfield, Al-Omar in the oil-rich Deir Ezzor region, in what was thought to be Saudi protection for experts of Saudi oil giant Saudi Aramco. According to the report of the Arabic service of Turkish news agency Anadolu at the time, the arrival of the Saudi soldiers at Syria’s biggest oilfield coincided with the arrival of around 30 trucks carrying drilling and digging machinery.

Oil majors bringing in foreign troops to protect their contracts.   Sometimes is it pipeline in Iraq, sometimes direct oil production. 

Betting on default

$16 Billion Ohio Police & Fire Pension Fund Approves A 5% Allocation For Gold

The unions are betting a victory for MMT,  devaluation.  But MMT will be short lived, about four days I reckon as the senators agree to default terms.  Powell will go along, he is practically begging for a way out of his deflation trap.

Housing bubble

New Yorkers Are Fleeing to the Suburbs: ‘The Demand Is Insane’

Over three days in late July, a three-bedroom house in East Orange, N.J., was listed for sale for $285,000, had 97 showings, received 24 offers and went under contract for 21 percent over that price.

On Long Island, six people made offers on a $499,000 house in Valley Stream without seeing it in person after it was shown on a Facebook Live video. In the Hudson Valley, a nearly three-acre property with a pool listed for $985,000 received four all-cash bids within a day of having 14 showings.

Since the pandemic began, the suburbs around New York City, from New Jersey to Westchester County to Connecticut to Long Island, have been experiencing enormous demand for homes of all prices, a surge that is unlike any in recent memory, according to officials, real estate agents and residents.

But housing delinquencies are up!

At the same time, however, a growing number of home owners are falling behind on their mortgages with tens of millions still out of work and growing signs that the labor market recovery is softening.

The National Association of Home Builders/Wells Fargo Housing Market Index rose 6 points to 78, matching a series record set in 1998. The median expectation among 30 economists in a Reuters poll was for a rise to 73 from July’s reading of 72.

The market has split and the split is mainly covid caused.  

Going home once more

‘The Americans are gone’: Iran happy US left Taji base

But I have no doubt some dumbshit, rural  senator will declare another war in the Middle East soon. It is in out, in out, all the way.

What the Fed really said

 

That the next five years will be like 2010 to 2015.  They simply stated we will be repeating a period of defltionary force.

The crap about inflation targeting was code word for high Fed taxes.

Also note, that if we complete the sequence without covid, we likely would be in a mild recession anyway.

The Fed change in program has nothing to do with inflation or employment.  It is all about keeping Treasury interest payments functioning.  That has always been the Feds concern since the Nixon Shock.  The real target since 1980 has been the one year Treasury, there is no faking the charts on that.

We have a useless dual mandate, and the Fed knows it so code words and fakery are the order of the day.

Tax dodging explains the US external balance sheet

A Big Borrower and a Giant Corporate Tax Dodge? How Best to Describe the U.S. External Balance Sheet

At the end of the day, perhaps, the equity side of the U.S. external balance sheet should be understood not by thinking of the U.S. as a giant and very successful private equity fund that borrows to buy equity—but rather as one giant corporate tax dodge for U.S. based multinationals…

The high value intellectual property is kept in foreign nations.  So that shows up as a foreign holdings.   

What happens in the long term? The money either comes back to the USA as dividends or the wealthy go live in foreign tax dodges.  But that is a very long term, longer than the US government can stay solvent. 

Mass UAV attack

 

Mass attack by UAVs. The attackers were foam based, home built, GPS guided.

How will the new 15 billion dollar Ford class carriers survive? By staying a thousand miles away from battle.  This is the problem in the China sea, too many UAVs fling around for carrier operations.

What will the USA do? Dig up John McCaint, burn his corpse for wasting trillions of dollars on useless hardware.

Kamala and the California unions are losing the election

Michael Moore & Bill Maher Beg Dems To Wake Up: "Enthusiasm For Trump OFF THE CHARTS! Are You Ready For Trump Victory?"

Biden got trapped with a lousy VP candidate.

 Hillary all over again. 

I blame Nancy and Newsom..

 

Until the Fed taxes hit the banking sector

Devastating Consumer Financial Cliff Coming Right Up

Note the Fed balance sheet included a big increase in seigniorage taxes that came with the stimulus.  That downward jump in excess reserves is equivalent to a Fed tax increase.   The stimulus is squeezed, each stimulus results in an immediate tax increase to our bank accounts. The can is not kicking, we have crowding out regardless of what Edmund says.

 

Nancy holds out for partial pension bailout

Pelosi slams GOP, says $1.3 trillion in coronavirus relief not enough

Speaker Nancy Pelosi (D-Calif.) on Friday rejected a White House offer for a $1.3 trillion coronavirus relief bill, saying the latest proposal from the GOP falls well short of what is needed to help Americans weather the fallout from the COVID-19 pandemic.

Pelosi said in a "dear colleague" letter to members of her caucus that she does not support anything less than the $2.2 trillion package proposed by Democrats. White House chief of staff Mark Meadows had floated the $1.3 trillion figure earlier in the day, saying President Trump would back it. The figure was up from the Senate GOP’s proposal of $1.1 trillion.

She needs  pensions to be a standard bailout item.  Any partial pension bailout helps establish the precedent.  It is a point of principle with the Dem leadership.  Repub small states have the opposite principle.

Why do we have reverse within timeout?

 Same reason we have timeouts, it prevents a congestion problem, as well as the fails to deliver fraud. 

If one trade submits his payment, it may be late, jammed in the queue, or mis-priced for the miners.   This is the same as communications failure.  

But the main point is fails to deliver fraud with asynchronous ledgers. The tweo traders lose on fails to deliver. The first to recall losses the least. The miners make a rising percentage.  The protocols assume ledgers are reasonably consistent intransit time.   The repeating cheat  continues to lose and the other losses spread about.

The optimum cheat then become never register your payment.   There is one cancellation, cheater gets nothing, other trader loses recall fee. These are spoofers.  I am not sure they are illegal in sandbox. Hmmm.

The problem sort of goes away with hand held spectre as both parties will agree to a provable contract, one including refundable deposits to cover fails to deliver.  Spoofers? We need anonymous credit ratings. Ny reasonable over the counter group with registration fees would stop the spoofing.

Deleting the contract ledger

 There is no currency crated or held, it is a neutral escrow.  Anything on the contract chain will be erasable when all parties have taken possession of assets properly.  At that point it can be erased. The escrow miner is fastest path in that it eliminates assets from the spectre cache asap. Escrow is a finite, stable exchange protocol. Composed of two or three spectre asset events.  It's short contract chain is observeable by all parties to the contract.  In Swift there are a few correspondent banks at risk, and they get notified sometimes, according to contract.

The escrow miners manage reverse within timeout, they insure against fails to deliver.  Extend this concept to industry in general.

And the distributed miner.  Each party does their own recall within timeout, and checks the ledgers it needs.  Make the hand helds bear the work.

Swift can win on currency controls

 The Fed sets enforceable limits. And the Fed has the tax dollar monopoly.  So, at very low risk, the New Fed can simply set the standard for biometric mini-Swift node.  In fact, they need only say it, emphasizing Swift control of limits.

It will be done, I looked through the tech markets, it is all here. But those limits are meaningless when transaction costs allow prices as low as a penny.  There is a huge market there because of the inherent ability to manage Internet traffic control with pricing. The Fed can mark that off against the Treasury inflation. But better management of the internet via pricing is an easy 3% gain in that sector, likely a 1% over all.  Just one component of the gains, and that Treasury devaluation is not scary.  This is a huge market all for the Fed and its banks, first access to the market. The shadow bankerswill be dragged right in.

A ledger model for contracts

I want to match a cache safe, spectre compliant contract outcome on the public chain. Registered, spectre secure proceses produce these outcomes from stable contract points where a provable exit was taken.  Then miners compete to put these up., or down, however the ledger works. It seems to me there must be a final path that makes this sequence marked to market, and the contract sequence deleted.

For example.  I am reading blogs and plopping pennies for material.  The local authors group runs a block chain and collects completed transactions, over time, asynchronously. Set this up in Swift, use peer bank transfer, everyone is a bank. Every week just go through the final outcomes and get signed off by the correspondent banks, then erase. Very simple system, it is integrated with Swift, that the thing. Banks become group fund managers, trusted miners, collect a fee. Bearer digital cash, even 20 bucks a month to start.

If true inflation is default

 In central banking that would be  be default by government.  Powell and that bunch have to get their distribution moments figured.   One could say default is the essence of the right to coin.  And governments do it.

Drop inflation altogether, focus on a long term separation between the Fed and Treasury. No one is restraining Treasury from default. I mean, 2% a year is high, yes, but the deflationary forces are actually stronger.   Leave the Fed out of it, it is caused by bad government banking and government should default on its own. 

The Supremes know I have this case because Fed independence has value and this is payment. We beat the 'debt is sacred' line in one of the bizarre amendments. The Supremes and I want time limit, 15 years sounds like a good pick. Treasury creates the Department of Deleting Debt obligations.  It will inherit the Fed balance sheet. Think of it as an asynchronous bond tax, the Treasury suddenly applies a tax with default spread evenly. The Fed is contracted to fair, non profit S/L risk bound to some ratio (1/5) of the capital in the S/L.

The gain here is enforced contracts, this is a big deal, it really helps everyone, the great equalizer.  The Fed needs to lead.

The entire AI debate today

 It is really one thing.

Can we allow a bot to hold a secret key unto itself and use it to communicate with other bots?

We all knew this spot would arrive.  There is no way the Fed can go to MIT and get a fake digicash, the math has gone too far.  It seems quite clear, looking at the market, that if the Fed is not renewed then Big Tech will assume banking duties.  There is no MIT fake for the problem.  There is one answer, the Fed takes Swift all the way to our hand helds and set the currency standard.

It the MIT folks want a useful thing to do, then prove to the Fed that having enforceable time and amount limits reduces the scofflaw risk to a controlled level. Prove to the Fed that provability is a sound theory, contract can be proven to stable points. Then show how this allows the Fed to dominate the shadow banking market for a ling time to come with expanded opportunities for the entire banking industry.

Optimum savings ratios

 They exist, but only in fair traded pits, under no arbitrage conditions.

We are not a fair trade currency system, as it obvious from the Fed balance sheet and cash flow. But private goods tend to be more fair traded.   The optimum savings ratio still exits, in units of goods, but prices are erratic when the currency banker is not fair traded.

Finite systems, bounded error, self sampled, there will be one fractional approximation that minimizes transactions.  In essence it is the optimum use of savings and credit in that you will almost never be third in line.

The standard Euler assumption generates optimum ratios. They assume error zero and everyone sufficiently sample. The two should follow each other, the Eurler condition just gives you the irrational ratio. For large N it is not a problem.

The uncertain assumption is risk equalized traders.  A very similar assumption as ergodicity. In sandbox, sufficient mixing is when there are pits for every level of risk. The Euler assumption is that each sector has sufficiently liquidity to keep up.

I have nothing against Euler, and Menzie uses it properly because log of growth shows the break points more clearly on the graph. They get amplified when one assumes sufficient liquidity always, but it is a good idea.. The trick is to get enough before and after around the break point you want to emphasize.

Being more ergodic means getting the Fed a long term contract and having Treasury manage inflation.  The Fed then obtains a fair sample of economic risk and the pits work toward the optimum ratio.

A bit of deflation

 After Buying DirecTV For $50 Billion In 2015, AT&T Now Seeks To Sell It For Under $20 Billion

Clobbered by youtube and netflix. If the satellites still work then consumers get cheaper TV.

Direct TV never got the store and rewind market going where a deice could collect a Direct TV program and store it.  It was ine too many devices for the user.

Calling horse manure on Edmund Phelps

There is also a worry on another score: call it the “fiscal capacity charge.” Some economists and businesspeople fear that boosting already high tax rates in the hope of raising the money needed for substantial poverty reduction would fail to collect much more revenue. Revenue might even be lost as taxpayers cut back their supply of labor and companies lose interest in increasing their efficiency. Yet there is not a shred of academic evidence showing that Western economies – and certainly not the low-tax US economy – have reached the limits of their fiscal capacity.]

From Project Syndicate.

This is easy, California crowding out the economy. It took us two extra years to recover from California's fiscal squeeze.  And we are seeing the problem in four recessions in a row.  If Phelps would like, I can chronicle the collapse of retail banking, the rise in credit card rates, and the Fed taxes.  Who pays those Fed taxes? Note those gray bars? Aligned with presidential regime change, and that is crowding out.

Phelps starts with a prior, then he and his crowd make sure they do not look at any contradictions. His crowd will say we can easily bailout Cal pensions, but will they bail out the small energy states which are going under? No. Phelps is a BS flat earther, as opposed to the just ignorant flat earther.  I say it is time to fire the whole bunch of the mathematically ignorant  economists.

Planning a long term seigniorage burden

Banks eye layoffs as short-term crisis ends, long-term costs emerge

The Fed, tax collector of last resort..

Kamala gets tiny clue

Harris Condemns Looting, Violence In Wake Of Police Shooting

There is a growing Law and Order movement among Black voters. They have very slightly shifted toward Trump.

This Powell plan does not flat earth

 Powell says there’s no strict mathematical formula; but it’s pretty obvious to me that the markets and pundits are going to hold the Fed accountable. People think in terms of decades, and this policy was announced in 2020. Thus markets will naturally see this a commitment for inflation to average 2% over the 2020s. Since the PCE price level was 110.917 in January of this year, it needs to be close to 135 in January 2030. A slight miss would not be a problem, but a big miss (say average inflation outside the 1.8% to 2.2% range) would be seen as a policy failure. The Fed would lose credibility.

Scott Summner. 

Scott is dead wring that markets can hold the Fed to this fire.  

This is a partitioned system, the Fed takes excess reserves from the regulated banks and loans to government,  It is not a mixing system, it will not be ergodic and Scott is out of boundary condition if he claims otherwise.  Powell has further complications in that the regulated banks have become tax collectors.

Powell is really  threatening to Congress, begin the default process otherwise it is deflation all the way.

Partitioned economies and ergodic

er·god·ic

Learn to pronounce

1. relating to or denoting systems or processes with the property that, given sufficient time, they include or impinge on all points in a given space and can be represented statistically by a reasonably large selection of points.

Sufficient time means all the partitioned sectors of the economy have gone through the diminishing returns. Sufficient time is a generation given the entitlements issue.  So if one wants to NGDP target, then one has to do it over a generation. 

So we are right back to the monetary cycle, and that is what we want to shorten. 

Shortening the monetary cycle.

This is what we want, we want to target a sustainable monetary cycle as short needed to match the entitlement updates.  The idea being that young kids do not suddenly discover they were ripped off and have to wait another 30 years.  In other words, default before the kids become antificants and before the old folks can run another scam.

Delinquent mortgages

Wolf Street: 

The Federal Housing Administration (FHA) prides itself in insuring subprime mortgages with, as it says, “low down payments,” “low closing costs,” and “easy credit qualifying” – all true. Of its active portfolio of 8 million mortgages that it insures, 17% were delinquent in July, the highest rate in FHA history. In many metros, the delinquency rates of FHA mortgages are above 20%; and in two metros, the delinquency rates exceed 27%.

Deceiving editorial from Fisher Investments

 Fisher Investments Editorial Staff 

 However, QE isn’t “money printing.” Rather, central banks exchange reserves for long-term debt, which they buy on the secondary market. Those reserves end up on bank balance sheets. New money doesn’t flow to the Treasury, which must continue selling all new bonds to banks and investors at issuance. 

When the Fed does E they impose a seigniorage tax. That tax is likely going to be near a hundred billion/yrear in the next five years. Fisher Investments are flat earthers. 

The Cal union plot laid bare

Blackboard brawl: How California’s teachers hope to avoid 60,000 layoffs

“We’re thinking about twice those numbers,” Boyd said. The union projects a looming budget shortfall of up to $20 billion, or “a big hole to fill.”

Instead, the union and allies like the California Federation of Teachers and Service Employees International Union are hoping to build on many successful distance learning negotiations to lobby for new taxes. Boyd said his union is advocating for a special legislative session to consider new proposed wealth taxes AB 1253 and AB 2088, which are opposed by Republicans and many moderate Democrats. Also on the table, he said, are more teacher strikes like the ones that swept Los Angeles and Oakland last year.

By Calmatters.

We will be getting the huge tax battle.  Who is going to get wealth taxes, either California or the Swamp, but not both.  Hence the long term negotiations which will take until mid 2021 to negotiate, if at all. 

This is the plot that Biden and Kamala have planned. The cause? Jerry Brown accepted a two tiered pension reform and now we are stuck with your radical teachers who just got ripped off by Jerry and the Boomers.  

Flyover country knows about the lot and Cal unions, along with Kamala, are going to cost Biden the election.

Horse manure from Pelosi

 Pelosi: 'I have every confidence' in Biden against Trump in debates

What you do not want is a bunch of questions in the debate concerning Kamala and the intent to sneak in a pension bailout.  You absolutely do not want the voters in flyover country to vote against a pension bailout for California, it loses the election.

Pelosi and Newsom screwed this up.  They instigated a political plot to trap Biden and it will turn out to be one helleva bonehead move, especially with Kamala in the lead on this.  Trump is running ads all over the country about letting Kamala rip off the small states and leave financial chaos.

Where is Kamala?

 Buttigieg: If Trump Can’t Stop The Chaos Now, Why Would He Stop It If He’s Reelected

If Kamala cannot go to Kanosha and calm things down they what will she do if elected?  

Where is she now? She is huddling with the public sector unions plotting to rob the small states for a pension bailout. This story goes both ways bonehead, er, Buttigieg.

My point exactly

 A Democratic Congressman prompted backlash this week after he claimed that anyone owning a gun in America has small genitals. 

Illinois Rep. Sean Casten made the comments during a Zoom call with college students last week. “If you are a constitutionalist, unless you’re a member of well-regulated militia, tell me why you need to own a gun, right? Having small genitals is not a sufficient reason to own a gun,” Casten declared.

And I note the Congressman obviously agrees with me on the Second.  And NRA nuts really do suffer castration anxiety, just look at the number of those idiots who die sucking on steel pipes.

I go further. The right to a regulated militia comes with the right to shoot NRA nuts with tiny penises. So here is one more reason to vote Dem, they understand the Second amendment.

Everyone allied against Jared and the Ottomans

Greece ratifies Mediterranean maritime border pact with Egypt

Include Italy and France.  e see that Jared little war flip put us on the wrong side. I think even Israel is now on Greece's side. Jared should give back the hotel he won in the deal.

Send Kamala to Konosha

'He Is Rooting For This': Biden Accuses Trump Of "Encouraging" Violence As Mayhem Begins To Affect Polls

If she ends up in Kanosha, then I will listen to your complaint.  

But the problem is you, you signed up for a one trick pony, get the pension bailouts.  Now you are frigged. Joe, you frigged up and Kamala is a negative.  You were warned about California. You made the same mistake that Hillary made.

Lebanon goes to the Ottoman Empire

 According to a report on the pro-Saudi Al Arabiya website published on August 19, officials in Lebanon are concerned at increased indications of Turkish efforts to build strength and influence in the country. The report quoted two sources in Lebanese intelligence, who mentioned recent Turkish efforts to bring weapons into northern Lebanon. “We are pretty worried about what’s going on. The Turks are sending an incredible amount of weapons into the north,” the website quoted its source as saying.

Dems are on strike until Repubs agree to pension bailouts.

 Pelosi On Stimulus Talks: 'We're Not Budging'

We can call this a full stop engineered by Newsom and Pelosi.  The plot from Newsom was a pension bailout or California is done for.  But they do not have the senate votes from small states who spent three years waiting for California last time. This time they are not waiting, the answer is no.

The Green Tort model

How Better Climate Data Can Help the Municipal Market

Finally a reasonable green model.

The author wants both municipal warming risk and mitigation efforts .  

More specifically, scenario analysis and better data may help to improve our understanding of the longer-term challenges facing municipal bond issuers in the United States, and help to inform the analysis of the possible climate threats faced by US towns and cities. More information could enable issuers to demonstrate the strength of their climate adaptation and resilience strategies, their risk-mitigation measures, and how such measures might be funded – all of which could contribute to more (and more comparable and useful) disclosure.

The poster is not proposing tort, yet, but recognizes the balance provided by the tort model.

It is amazing the number of PHD economists who are completely flummoxed by the idea, as if they never heard of Coase.  Instead they knowingly engage in fraud on the issue.   Ten years of pointing this out and finally someone gets a clue.

Regulated banks lose market share on Powell's deflation policy

Stocks jump on Powell's inflation plan

Powell sacrificing the regulated banks and shadow banking no becomes the norm.  At this point Powell would prefer an independent decision from Congress to create their own inflation, the Fed cannot do it.  But Congress has the room temperature iQ problem.

We are kind of screwed. If banking and the economy survive it will only be because sand box can extend shadow banking to everyone. But we do not have time, and big tech is stalling.

Blundering economic theory

Since money, exclusively in this model and primarily in the real world, is the sum of the Banking Sector’s Liabilities and Equity, any action which increases Bank Liabilities and Equity creates money. Since every transaction is recorded twice, operations which increase the money supply must therefore occur on both the Assets and the Liabilities/Equity sides of the banking sector’s ledger. Operations which occur exclusively on either the Assets side, or the Liabilities/Equity side, shift money between accounts and do not create money.

The poster is deriving MMT theory based on double entry accounting being accurate.

Double entry accounting is not accurate. At any given time, a large chunk of liabilities wander off into shadow banking and to not appear on the regulated balance sheet for some timer.

It is exactly the uncertainty between assets and liabilities  that the currency banker manages.  It is not a given, it one assumes the two are always in match then one causes cycles and government devaluation eventually.  The Bank of England model assumes there is an exact deposit to match the new loan.  There is not. What is happening in that model is that a loan automatically causes the bank to move the borrower up to the top of the queue for deposits.  That shifting of the queue by fiat results in accumulating currency risk which eventually gets passed on to government and tax payer.  It is one of the greatest blunders in scientific history.

Economists are having a very difficult time right now working the better banking theory. I think they are suffering career stress as a result of a lifetime of blundering.  The Naked Capitalism crew are completely clueless and should be ignored on the topic.

Right to a regulated militia

 Many California police reform efforts have stalled despite push from protests

Boat anchor in action

Weekly jobless claims remain above 1 million; 1 in 5 are in California

And, like last time, most of the economy has to wait for California to catch up. I doubt the small states will wait, this time around they will let California flail.

No, Yglesias, this is a lousy critique

  Matthew Yglesias @mattyglesias ·  Good critical thread here on the Fed’s new framework 

 Skanda Amarnath ( Neoliberal Sellout ) @IrvingSwisher · 21m Now for what I see as the most disappointing aspect to the Fed's framework review...the doubling down on inflation targeting. I think the Fed rightly sees its primary error as one of insufficient accommodation, but the reasoning and remedy are both flawed https://medium.com/@skanda_97974/by-doubling-down-on-inflation-targeting-the-fed-is-at-risk-of-forgetting-lessons-from-2008-2011-f877f78acba2 Show this thread

The poster unveiles a variety of targets rather than inflation, none ofwhich coalesce into any normative theory of banking.

The poster does get one thing right, the fake expectations game.  That game is not bout the agents expectations, it is about covering up a major blunder in banking theory.

I have the correct critique, and Matt Yglesias is not allowed to use the correct critique until his philosophers (Krugman) get his clue together. That may be a long time.

Here is the Yglesias, Krugman, Drum, Delonmg, Bernstein blunder.  The Fed is proimisin a huge seigniorage tax on =the regulated retail banking sector. In response, investors are russing to investments in shadow banking where the Fed tax cannot be enforced.

This is extremely regressive and extremely deflationary. Yglesias, Krugman, Drum, Delong, Bernstein all take the blame and responsibility for income inequality.  They cannot escape the blame, it is mathematically provable that this blundering banking theory is a disaster for poor and middle class.

How many MDs take Dr. Trump's advice?

American Medical Association criticizes new Trump testing guidance

Powell Pretending

Jackson Hole

In a speech on Thursday morning, Powell acknowledged the painful lessons of runaway inflation in the 1970’s, but warned that the persistence of low inflation over the last eight years risks new economic difficulties.

“Many find it counterintuitive that the Fed would want to push up inflation,” Powell said. But the Fed chief warned that low inflation leads to declining inflation expectations, which has the effect of “diminishing our capacity to stabilize the economy through cutting interest rates.”

One can see the implications.  

They are frightened about the Nixon Shock and cannot speak of it.  Thus they cannot discuss the idea of doing a Nixon Shock much better.   The result is that we get exactly the same thing as a Nixon Shock as everyone is unprepared for the regularly scheduled devaluation.

It very closely resembles a mass mental illness, a kind of institutional schizophrenia.

Turkey is no longer a NATO ally

France & Italy Join Greece In Major Naval War Games 'Show Of Force' Against Turkey

France has since confirmed deployment of its ‘Lafayette’ frigate and three Rafale fighter jets to Cyprus, also as what's being described as a "massive maritime exercise" is underway in the eastern Mediterranean on Wednesday involving Greece, Cyprus, France and Italy.

Called the “Eunomia” military exercise, it's a clear and firm signal to Turkey meant to - as Greece's defense minister said, reinforce “the rule of law as part of the policy of de-escalating tensions.”

Defense Minister Nikos Panagiotopoulos spelled out specifically that—

“the initiative… aims to demonstrate the commitment of the four European Mediterranean countries to the rule of law as part of the policy of de-escalating tensions.”

The drills are set to run from Wednesday through Friday of this week.

Jared may have chosen the wrong side in his Middle East flip.  He will have to give the hotel back.

Yes, different and where is Kamala?

After Kenosha — Divided We Stand

Kenosha is a small city of 100,000 people who mostly go fishing.  Their cops are local teenagers, people are supposed to be peaceful.

These local cop kids have little experience dealing with the complexities of ghetto life, and evidently Kanosha had a small ghetto. The town itself is the victim of a national dispute, caught out of nowhere and thrown into this mess.

The ghetto kids should be smart enough to be aware of this, and stay calm. That is the failure. This is not Chicago or New York, this is a small town without the scale to deal with a national problem.

Why isn't Kamala in Kanosha at this moment?

I would think this is the point where Kamala goes to Kanosha and explains the problem as I have explained it. If she does her job in Kanosha then we have a Prez Biden.  Where is she?

I can tell you. 

She is one tracked, her only job condition is to make the pension bailout happen. She was the wrong choice, she will not do her real job. Once the voters in Florida get the clue about Kamala, then we get Prez Trump again.

An oxymoron

Elon Musk Hints At Electric Jet Battery

Jet refers to hot burning gases. Elon really thinks he can double energy to weight.  This allows the electric plane to double mileage, to 100 miles per trip.

City Journal peddles horse manure

As the U.S. struggles to emerge from the Covid-19-induced recession, Joe Biden is running for president on a pledge to return the country to economic policies responsible for the slowest economic recovery since World War II.

Noon Williams at City Journal. 

I can go through the list.

Nixon- Nixon Shock, the most foul devaluation in American History

Reagan, bailed out the Texas S/L disaster, we never recovered the money.

Bubba Clinton. Longest growth record in post war history, balanced the budget.

Lil Bush, bankrupted the economy, left us with 10% of GDP in deficit.

Obama, fastest recovery of deficit in post war history, and then the longest expansion on record.

Trump, we were already entering our recession cycle, he ran up the deficit to records,  then he fouled the covid problem.

Advice: City Journal needs  education.

The Kamala affect

Trump Cuts Biden Florida Lead in Half

Floridians are not that enthusiastic about bailing out California pensions.

Israel will regret the Ghost and Goblin crowd

 Pompeo’s Jerusalem Speech Hits Home With Israelis No Less Than Evangelicals

Israel would be foolish t rely on a bunch of uneducated rural hysterics in the evangelical crowd.

Do we suffer unsustainable PSST?

 Should they be called Marxists?

Well, Arnld, Marx's point was that there is a bubble at the end of industry where the sustainable market size is not available and a bubble collapses.

Straight out of PSST.  Did Marx anticipate Kling?

The bankers suffer Post Nixon Shock Syndrome

Federal Reserve chief to outline plans 

The Fed has long approached its dual mandate of price stability and maximum employment as a tradeoff between inflation and joblessness. Times of low unemployment and low interest rates were seen as threats to price stability, prompting the Fed to raise interest rates to avoid spikes in inflation.

That view was largely shaped by the legacy of former Fed Chairman Paul Volcker’s crusade against staggering inflation during the early 1980s, which topped 10 percent annually. The Fed under his watch hiked rates to induce a recession that slowed the economy but also the pace of price increases.

Volker. He rode roughshod over the default years when prices were nutty. After the 72 gold default there was a streak of mass hysteria, starting in Japan. The trauma worsened and we got a 'This time is different' psychosis.   I guess in the 70s we discovered out government is mostly comprised of lunatic politicians.

Proof of stake?

 I suppose that if a group of agents and miners agreed to a contract, and the contract was stable between them, then they and they alone have to agree and record this on the ledger.  ETH uses a public distributed block chain, it catches double spenders quickly.  Bu that function is incorporated in the contract.   All stbl point in the clause exits require knowledge of the ledger state.  So provability would have caught that and required a call to an external trusted miner.

So, the smart card uses the ETH block chain ledger, and also uses local proof of stake. Proof of stake is simply a contract partition, assumed to be closed under the contract.

An aside here. If the kernel is rusted then the contract could specify a spectre kernel will handle the active ledger with a hot wallet.  Participant dump their risk cash in the kernel wallet, then run the contract. The kernel code is considered a trusted miner, it can be verified just like any solidify code.

Escro w officers often want checks written to the escrow bank.  If the kernel is participating, then it already has the necessary currency regimes loaded. Step one, all participant dump all assets into the kernel account, in the instruction cache.  Write the provable contract to have the kernel be paymaster for all bets, never use external ledgers at all.  Participants, all kernels them selves, can receive cash payouts and decide for themselves about ledgers.

Contracts serialized?

 I hope os, let me assum that.

Then for any participant who has completed a term in the contract will pass the entire contract remaining to the next participant. Each point where a term is completed, the block chain advances, recording  tem completions.

So, I guess, that is the bi deal with ethereum, really an escrow service. And here value added is automated security from race conditions via provability.  I am thinking we need a simple contract byte code the kernel can interpret right inside the instruction cache.  Most of the critical components of contracts is validation of an external ledger entry. Making sure payments were made and managing  recalls within timeout.  A simple byte code interpreter could simply be a compile time restriction to a limit set of binary code. Then spectre specifies compile time equivalence, and we can check sum each stable portion of  contract clauses, right in the instruction cache.   

So we have secured the codes, keys and bots from thumb print to pricing in the pits. We are perfectly compatible with btc, eth, dollars, and tethers.  The technology extends t any spectre compatible set up, having enforceable contracts.  We can divide BTC coins into any number of small cash pieces, collect them in whole or part, and put them back on block chain.  Smart card can handle ethereum contracts, as is. It can be a robotic Swift account, dispensing dollar bearer cash via a shadow network.

Smart card has enforceable contracts with Due Process stable exits. iPhone can do it. What is not to like?

Apple kernel security

In addition, the operating system kernels enforce access controls to prevent unauthorized access to data. These controls most often take the form of sandboxing apps (which restrict what data an app can access), as well as enforcing Data Vaults. Data vaults can be thought of as inverted sandboxes. Rather than restricting the calls an app can make, Data Vaults restrict access to the protected data (again, enforced by the kernel independent of file encryption) regardless of whether the originating process is itself sandboxed or not.

I like it, but it is missing something.

 I need a contract that I cannot break, except through a predefined exit.  Thus the subscription manager can give me no double spending tokens, cash, which I send freely to any other subscriber, with no third party.

Apple can add this mode, easy enough, with a timeout.  It needs to keep some memory that is kernel only, read and write and that data cannot leave the instruction cache. But it must have a timeout.   Otherwise, you burn your thumb sand can never get the buggar out of the instruction cache.

For subscription services, the exit takes place at the end of the month, before renewal.   So if you  have smart card, then you will still need to review all your contracts, monthly or quarterly.  The sandbox forgets, it relies on trading pits and ledgers. Making a semi martingale from pit action is forgetting, consuming all past knowledge at once. Taking the Coasian price. It removes arbitrage.

So, with the kernel having authority to keep tour contract, then we have what is needed for spectre compliant.  And the processor has a timeout, the smart card expires. It must be renewed, in the sense of activating the security coin and revalidating and update keys.

So, in effect, a mall kernel change in the iPhone and we have all we need for sandbox in any currency.  Even with an uncooperative central bank, we can slip an automated layer onto any regulated account.  But I know Powell, he will go for bearer digital asset if he gets an escape from Treasury and Congress. H knows the tax dollar is losing more and more market share. It needes to compete.

If two iPhone uses both had contract enforcement then they could exchange cash in any currency, direct even though they are strangers..  We can see how easy it is, it allows the bots to have autonomy, and this scares the regulators.  But the timeout, we can enforce limited liability. The kernel will obey cash channel contracts.  Thus if the user agrees to the complete Swift currency contracts, then they agree with a specified kernel timeout on liabilities, and a contract is a liability.

The system allows perfect enforcement of accounting rules across corporations, and long as they have iPhones. It can be taylored to track shipments. Unlock data to the proper security. 

Apples run Solidify, and Solidify has the hooks for provability. Also we can make a UBS dongle for analog logic keys. But that is lower priority than enforced, stable  contracts.  All we need is another 100 lines of kernel code.  Anytime two or more iPhones enter a contract, they only need start with a public verification key., in which each signature is recorded. Then they agree on the contract, the system is provably stable up to a counterfeit.

Expense accounting is an enforced app. From start to finish t account for cash purchases by corporate rule.  Trading rules, a special contract for operating in a pit. The rules enforce round robin access with congestion fees fairly allocated.  A series of over the counter trades two iPhone user may use to exchange cash and equity in a specific environment.  

Trading pits are spectre compatible, and you o can use python or solidify.  The trading algorithms embedded in contract segments. They are generally well proven with all the needed interface points into the trade board. Trading bots can be in one of three states, in the cache, making a bet, in the cache, communication with an external, or securely idle.

We can do this with iPhone, we just need some kernel space. And some memory bracket that is kernel only.  There are two or three kernel operations that interact with this protected space.  With that we can get provability. Do a lot of neat stuff with iPhone. Improve the lives of everyone equally which is a big win for the poor.

What about ETH?

Ethereum is a currency channel with contracts and each iPhone is a miner.  But it only makes a local chain with contract participants. Then the completed contracts are released to the general miners. They keep a history of ETH and the contract paths, evidently.  In provable contract, all the participants should agree on the outcome, as all timeouts expire.  So the participants accept it has completed work.

So a big harry chain of solidify must be on their block chain in a verifiable form. So the smart card carries a portion of the ETH block chain.  Then on contract completion they all sign off and are don since there should not have been any conflicts.  

Can big tech keep rising in stock price?

 Basically, they trade stock for cash and keep the cash in the shadow banking system.   But they lose ad revenue in the process, the economy i running at  75% capacity over the year.  They are collecting paper and losing valuable digit streams. The regulated banks are losing share, the big tech firms eventually have to start shipping digital dollars and payments an deposits and loans.

What good is a search engine that always leads to highly taxed cash purchased? More and more consumers drop he regulated card due to costs, or avoid credit on the account.  But the ability to hold Apple stock comes with low transaction costs at Robin hood online trader.  Apple becomes the fund manager for a huge chunk of shadow banking, but shadow banking is encroaching on Apple financial applications.  Apple and Amazon and Walmart all offering prime purchasing accounts, credit is available on these accounts. None of them FDIC insured, all with low cash limits.

So, if things stay the same, Big Tech is in the banking business.  Regulated banking dries up.  The excess reserves distributed back to bank share holders. The Fed then has no market to test is taxing power. The government has free reign to run a default stream.   Big tech wins when they run the trading pits as pen access,  like the search engines. All their ad revenue returns.

Without ads the media, news, is dying. But it can survive with bearer asset of a dime or less for article purchase.  So, online readers who are verified for small amounts of cash can buy news on the sot.  But that is low risk, we do not need smart card security.  Registered readers who cheat will be discovered before $50 is lost. This is very low risk retail, no need for expansive security, we can do this with normal pass codes on an iPhone, make encrypted change, a penny to a dollar. Blogs which turn in cash nightly will discover the occasional hack the cost them a dime, but if the cash passed encryption, then he cheat has a home address to track.

The market for tiny change.

I sign up for the service and deposit no more than $50 per month.  I receive encrypted change, pennies, dimes, quarters, dollars.  I ship out pennies and news ships back text. Th loose crypto change would be widely popular since it almost immediately becomes tax dollar on account. But it is not hack proof, and subscribers need to watch for virus as usual.  This is no more risky then using your credit card, except there is no third party payment master. I do not need secure card, do this on an app, run the server to manage the tax dollar accounts.  Tiny change keeps the local news alive.