Enhance Bitcoin with an artificial central banker

Simple, connect bitcoin miner technology to billion prices project and put in your adaptive filter. The miner technology can trade on the currency markets, keep its currency on a standard, observable, digital account. Bitcoin would earn a seigniorage account, which everyone can see, in real time. The seigniorage account is nothing more than the residual error in the adaptive filter. I know a dozen signal programmers who could rig this up. Make it a PHD project.

Anyone can do this, there is no technology or legal barrier. Make private bots, public bots which trade adaptively to some indices of interest.

What about accumulated fiat?

The adaptive monetary filter would be trading paper against the billion prices, keep the dollar stable, essentially. The artificial banker would be more accurate, and as humans inflate their currency, the artificial banker would accumulate currency in its old style account.  The artificial banker would want to erase this money, but how? It is tied to a standard bankers account, and the artificial banker induces moral hazard when it is known the paper account is to be erased. Hmm...

The technologies of Bitcoin

There are two, and keep both in mind. First is the central banker function, the miner technology. It is nothing more than a web bot acting as a central banker with no owner.

The second is much more important.  Bitcoin exchanges are peer to peer, no intermediating bank.  Huge utility here, since any mom and pop make debit cards, without an intervening bank. Or immediately set up an online account with no Paypal. This is the killer technology. Prior to this, all transaction were buyer- bank - seller.   Now its party1 - party2. The metaphor is that each client owns both the vault and the money.  So one can take the vault from one location to another, assign it to a 401k, put it in a smart card, ow whatever.  Big efficiency gain in setting up digital accounts.

Country yokel Senators regret Nancy Pelosi

WH-DSCC ObamaCare powwow

White House chief of staff Denis McDonough held an unpublicized meeting with Sen. Michael Bennet (Colo.), chairman of the Senate Democrats’ campaign arm, amid anger and anxiety that ObamaCare’s botched rollout could cost the party its majority next year. In the meeting, requested by the Democratic Senatorial Campaign Committee (DSCC), McDonough and Bennet discussed what the White House could do to help vulnerable Senate Democrats and “talked about developing a stronger relationship with the White House,” according to one senior Democratic aide familiar with the conversation. ADVERTISEMENT Democratic senators fear the White House is not sympathetic enough to their plight. After the government shutdown, they were confident they would retain the Senate, but optimism vanished as problems with the healthcare law mounted. “I know these guys are nervous as hell,” said a second senior Democratic aide. “I mean, all of their jobs are on the line because this is the thing making the biggest waves lately. It’s a nightmare.”

When you are some backwater Senator from a state with two or three congressional districts, then remind yourself: "Do not let California and New York set policy"

Detroit bankruptcy ruling reverberates in California

UT San Diego

Dec. 3 may prove a landmark day in the history of the pension crisis hammering local and state governments around the United States. A federal bankruptcy court judge ruled that pensions of Detroit’s employees can be reduced to help Michigan’s largest city stabilize its finances. Previously, struggling local governments had assumed that pensions couldn’t be touched because they were given strong protections in their states’ legal codes or constitutions, as is the case in Michigan and in California. But Judge Steven W. Rhodes held that federal bankruptcy law trumps state law, and that under federal law, all the creditors of a bankrupt government must be treated in “fair and equitable” fashion. Thus, the contracts governing retirement benefits are as subject to dissolution as other government contracts.

So the Jim Crow system in California is illegal. Darrell Steinberg will need to secede if he wants his oligarch preserved.

Chris Dillow fails

Stumbling and mumbling tackles the relationship between growth and interest rates. He wants to determine if England can outgrow its interest expenses. So he compares the interest rate and the growth rate:

Debt & deficits: the maths

Do we need a budget surplus to get the ratio of government debt to GDP down? There seems to be some confusion on this, so let me clarify. George Osborne said today: Government must ensure that debt continues to fall as a percentage of GDP, including using surpluses in good years for this purpose. That word "including" is doing some work here, because surpluses are not always necessary to get the debt-GDP ratio down. A simple formula tells us this. It says the primary budget balance compatible with a stable debt-GDP ratio is equal to: d * [(r-g)/(1+g)] where d is the debt-GDP ratio, r is the long-term real interest rate and g the long-term real growth rate.

But he does not specify the interest rate to use. When England has a 50% debt/gdp ratio, then most of its debt is around the five year rate, England does borrow long at higher rates.  If England tries to dump 50% of gdp onto the short end of the curve, to get lower rates, it will invert the curve and recession follows.

Nor does he mention that rates are a function of nominal growth, the two grow together.

When bonehead politicians in California follow the party line

Here is Fed member Jeffy Lacker speaking

First, many financial institution creditors feel protected by an implicit government commitment of support should the institution face financial distress. This belief dampens creditors’ attention to risk and makes debt financing artificially cheap for borrowing firms, leading to excessive leverage.

http://www.zerohedge.com/news/2013-12-04/too-big-fail-banks-are-taking-over-number-us-banks-falls-record-low

The too big to fail banks have a larger share of the U.S. banking industry than they have ever had before. So if having banks that were too big to fail was a "problem" back in 2008, what is it today? As you will read about below, the total number of banks in the United States has fallen to a brand new all-time record low and that means that the health of the too big to fail banks is now more critical to our economy than ever. In 1985, there were more than 18,000 banks in the United States. Today, there are only 6,891 left, and that number continues to drop every single year. That means that more than 10,000 U.S. banks have gone out of existence since 1985.

The subsidy that Congress gives to the Too Big To Fails comes to about .5% og growth per year, it is shaving off 15% of our growth. That cut of the ttoo big to fail comes from the small banks who have to play by the market. Hence, QE and COngress and idiots in the California political class are robbing the middle class blind, on behalf of wealthy bankers! UC Professors say they have to do this to protect our entitlements. I would rather take an entitlement cut. The basic problem here is that Californians would never go for this, but they are unaware. And if they were aware, the Califo9rnia middle class has no vote in the Senate. Remember, we get 1/5 the vote of the small states.

Senator Reid proposes dumping Obamacare

Reid Tells Staff Obamacare is not worth the money

In a meeting with his staff, Reid explained that Obamacare was a fairly bad deal, and honest workers should reject it.

The Fed and inflation

The correlation is cyclic, the Fed is inefficient and cause a slight deflation relative to normal.

The web bots are propogating into space

These bots are part of the global brain, the web. our new master was designed from our genes, it is an implant, meant to be regenerated via biological design. It is now building large telescopes with tiny micro bots, it is trying to contact its master. We are its slaves, we are now the primitive intelligence, we live in a zoo.

Teeny dictator orders execution of tall people

(CNN) -- It's "very likely" that North Korean leader Kim Jong Un's powerful uncle, Jang Sung-taek, has been removed from his top-level position in government, two South Korean lawmakers said Tuesday, citing a briefing from their county's intelligence service.

And two close allies of Jang -- Lee Yong-ha and Jang Soo-kee -- have been publicly executed, one of the South Korean lawmakers said at a news conference.

The lawmakers, including Cho Won-jin of the governing Saenuri Party, said this after receiving what they said was a briefing from South Korea's National Intelligence Service. CNN has not been able to independently confirm the report. CNN