Our money is broken, and the sooner we wrap our minds around the implications, the better. In Broken Money, Lyn Alden, a lucid writer and gifted teacher, offers a highly readable grand tour of monetary history: she explains the emergence of money, what makes a good or bad money, how money gradually became more and more "abstracted" away from gold, and how the modern fiat financial system evolved. Most importantly, she explains, clearly, how inflation, purposely designed into the modern system, is used as a wealth extraction tool:
"...the financial system in its current form is designed in such a way that 1) the money supply continually inflates, 2) purchasing power is gradually siphoned away from savers and toward arbitrageurs who sit near the source of money creation, 3) the system rewards large and well connected entities at the cost of small and poorly connected entities, 4) liabilities gradually shift from the private sector to the public sector to keep the system from ever clearing out debt, and 5) this process suppresses volatility for a while until most of it comes out all at once."
If you wish to navigate a system successfully, it is imperative to understand the interests and agendas of that system's participants. In a modern fiat currency system, currency users (you and me) have oppositional interests from currency issuers (nation states). Users want stability in that currency's value, along with privacy, liquidity, and ease of use. And we don't want inflation, one of the cruelest forces imaginable.[1]
Nation state issuers of a currency, however, have vastly different interests: they typically want control mechanisms, easy surveillance, easy seizure, and the ability to print money when it's politically or economically expedient. Note that all of these things help keep a regime in power by enforcing, centralizing and strengthening state control. See Chapter 16 for more on this disturbing issue.
[A quick affiliate link to readers to the book here. You can support my work here by buying all your Amazon products via any affiliate link from this site, or my sister site Casual Kitchen. Thank you!]
Only by understanding these conflicting agendas can you really understand modern currency systems[2], their long-term ramifications, and how to save yourself[3]. If you're a student of monetary history, you already know what to do. If you're not a student of monetary history[4], you must think about what's coming:
* We are likely to face inflation, probably a lot of it, and probably for many years,
* With that inflation we will experience more financial repression,
* The coming period probably will look a lot like the 1940s and 1950s, as the United States does a slow-motion inflationary pseudo-default on its debt just like it did after World War II.
A few other things struck me in this perceptive book: for example, how an advanced society can extract value from a less advanced society, or a conquering society can extract value from the society it conquers, just by using the money supply as that device of extraction. We saw this with colonial empires mass-manufacturing glass beads (in Africa) or mass manufacturing wampum or shell money (in the Americas) to suck away economic value from the indigenous economies. See also WWII-era Japan, which used "invasion money" throughout Asia, or France and its monetary neocolonialism of various African countries using the CFA Franc system, or the USA and its monetary neocolonialism of Latin America. Note also that the US is doing a subtle version of this to the entire world via the petrodollar reserve currency system.
Chapter 9, Printing Money for War, is must-read material. Know how your country has--and will--fund war via inflation, destroying your fellow citizens' savings and enriching elite Cantillon insiders at the same time. It's gross, it's disgusting, and it's done constantly, especially in today's endless war era.
There is also an exceptionally balanced and clear discussion of the pros and cons of proof of work versus proof of stake cryptocurrency systems. If you're interested in Bitcoin or Ethereum (hopefully both), Chapters 22-25 are required reading. These chapters cut through all the propaganda and nauseating token shilling that happens on cryptoTwitter and elsewhere.
I have just two very minor criticisms: the book could use one more editing pass, and it would help readers enormously if it had an index. Minor. This is a genuinely insightful book that takes a good, hard look at the monetary water we're in, and it is an important read for everyone.
Book pairing recommendations:
Footnotes:
[1] Beyond the obvious fact that inflation is an invisible tax, cruelly siphoning the people's wealth off to a small coterie of elite Cantillon insiders, inflation also raises the difficulty setting of life for everybody: it weakens most people financially; it drives GDP statistics by forcing people to engage in unnecessary pseudo-economic activity to preserve their labor value and household wealth; it lets the state double-dip on people's savings by taxing them on phantom capital gains due merely to inflation; it shortens people's time horizons; it lowers trust levels across society; it brings people in opposition to each other; and as a result it divides and weakens the people, making them far easier to command and control.
[2] You can also apply this mental model to cryptocurrencies: see for example the oppositional interests of issuers of the centralized shitcoin Ripple, or the issuers of useless TRUMP tokens, compared to the interests of those tokens' buyers/hodlers.
[3] As usual, all roads lead to Bitcoin.
[4] Strangely, most history contains very little monetary history, and most historians know embarrassingly little about monetary systems. The more monetary history you learn, the more you see that it is foundational to history: you cannot understand history properly without it.
[Readers, once again, what follows are merely notes, quotes and reactions to the text. They are meant to organize my thinking and help me remember. It's too long, life is too short. Please read no further, unless you want to (maybe) skim the bold parts.]
Notes:
Introduction:
viiff Discussion here of extreme (actually not so extreme once you learn your monetary history!) currency events: for example Lebanon, Nigeria, Turkey, Argentina, Brazil and many other countries; all with significant inflations; the author asks why does money function so poorly for all of these people?
x The author contends that the financial order we've been in since the 1970s, the so-called "petrodollar" or the post-Bretton Woods agreement, is entering a period of reconstruction and realignment.
xi ff On the book's structure: Part One is an analysis of why money emerged naturally and a discussion of the ideal properties of money; Part Two is about early protobanking services and the rise of full service banks, abstracting away physical monetary settlement; Part Three covers the global financial system since the 20th century with failing gold pegs after World War I, Bretton Woods after 1940, and then the Eurodollar/Petrodollar system since the 1970s; Part Four is on how money is created within the modern financial system and how debt destabilizes the system over time, also a discussion of warfare without taxation and the use of inflation as a tax and finance tool for governments; Part Five looks at digital monetary innovations in the 21st century including Bitcoin and stablecoins; Part Six discusses the ethics of money, communication in cryptography, and open versus closed financial networks.
xiii "This is not a gold book, not a banking book, not a Bitcoin book, and not a political book."
Part One: What Is Money?
Chapter 1: Ledgers as the Foundation of Money
1ff Discussion of tablets from Mesopotamia; the idea of a social credit, giving an example of two siblings trading chores; and then extrapolating to a small band of humans and how they would keep track of who did whom a favor.
3 Moving to examples of trade with people we don't know [as opposed to with people we do know], where you would do spot training, and you wouldn't keep a ledger necessarily, because you don't have the luxury of trust with strangers that you would have with tribe and family members.
6 The development of physical money, in the form of jewelry, beads, shells, that were lightweight, could be worn, wouldn't decay or spoil.
11 On shells, beads (and commodity money more broadly) as nature's decentralized ledger. Commodity money is a measure of surplus time and resources and a measure of savings and value.
Chapter 2: The Evolution of Commodities as Money
13ff Wouldn't the time and resources spent on making shells or bead money (or any kind of money) be wasted in a hunter-gatherer environment? Alden says that having a standard and credible medium of exchange and store of value makes all economic transactions more efficient, therefore it's an excellent use of resources. Also the more items produced by an economy means that barter becomes a bigger and bigger problem [barter doesn't scale], so you need an exchangeable money source even more.
15 Carl Menger and his discussion of the origin of money, saying an ideal money transports value across both space and time; note also extreme rarity is a problem because it sacrifices liquidity, you want the money to have scarcity but not too much scarcity.
16ff On the various advantages of gold: it has a stable stock-to-flow ratio, etc. Why it works better than other rare things like rhodium or meteorites which are not divisible or are so rare that they're not liquid, etc.
17ff Discussion of various examples of things used for money, ranging from salt to shells to furs to sugar to silver to gold etc.; On silver as one of the best for everyday usage because it's more divisible and has lower value than gold; it's the most useful "tactical" money.
20ff The author walks through various examples of types of money that worked until they didn't; shells worked until a guy in New Jersey started a wampum factory; note also this quote, bringing to mind the book Throne of Grace: "John Jacob Astor of the American Fur Company purchased this industrially produced wampum and used it to trade for furs with indigenous populations in Canada." [!!!] See also tobacco, which didn't have any scarcity because people would have an incentive to grow it just for the monetary premium; thus the government limited production to certain groups to create artificial scarcity [in other words you had "Cantillon insiders" who had access to the tobacco money printer here].
23ff See also the large stones of the people of Yap; it's interesting to the author that both an Austrian economist and an MMT economist cited these stones, despite having very different conceptions of what money is: Austrians thought of money as a commodity whereas MMT economists would look at it as a public ledger; basically the Yap stones never moved, there was just an oral tradition of remembering who owned which--a literal ledger system. And it worked until an Irishman figured out how to quarry Stones much more efficiently; thus basically better technology broke the stock-to-flow ratio of the Yap stones, although the locals assign more value to the older stones that were verifiably quarried by hand, those remain scarce just like there's no more Vincent van Gogh paintings anymore.
26 Interesting discussion here also about glass beads traded in Africa as money; they were convenient for pastoral societies because you can wear the money in the form of strands of beads and they were difficult to make; except then the Europeans started to manufacture them and used them to devalue the money, and extract value from these societies in the process; this is a theme that we're going to see repeatedly in history. In the case of these African cultures they traded scarce local goods that had real value for worthless beads that they didn't know were worthless. Alden puts it very well: "Picking the wrong type of money like this can have dire consequences."
28 Japanese invasion money: when World War II Japan invaded Asia, in various countries the Japanese would confiscate all hard currency from locals and issue paper currency in its place, which was called invasion money; thus you're forcing the conquered peoples to save in and use a currency that had no backing or scarcity (and would ultimately lose all its value) and furthermore, the conquering society could extract all the savings of the subject peoples while maintaining a temporary unit of account in those regions. "This is sadly what happens throughout many developing countries today: people constantly save in their local fiat currency that, every generation or so, gets dramatically debased, with their savings being siphoned off to the rulers and wealthy class." [Heuristic: think of any fiat currency metaphorically as "Japanese invasion money" to help you keep in mind that the money is debasing, constantly and relentlessly, and this wealth is being siphoned off to others.]
29 Using grain for money: this is also a problem, because the money supply changes radically throughout the seasons, obviously harvest season creates a lot of new money.
30 Certain instructive aspects of video game money: see Diablo II, where in-game gold wasn't actually the best form of money for various reasons, instead Stone of Jordan, SoJs, actually became the unit of account in the game for a period of time, until players later managed to figure out how to duplicate them.
Chapter 3: How Gold Won the Commodity War
36 There's a poor sentence here that could be phrased better, but the insight is foundational: you have to properly understand the supply growth of the money that you use or you're going to have your wealth extracted from you if you save in that money; further you must understand the stock-to-flow ratio of that money/commodity, one way to measure it is the inverse (or the flipped fraction) of the inflation rate: gold has traditionally been 1-2% inflation rate (or a 50 to 100x stock to flow ratio), silver's stock to flow is more like 10x or 10% (note that because silver is "used up" by industrial uses, the outstanding existing stock is small).
38 On thinking of legal tender precious metal coins as having three layers of value: the metal itself, the convenience premium or verification premium, and then the liquidity premium because of their often mandated acceptance and recognition as legal tender.
38ff Useful discussion here of a theoretical debasement of a currency; then a discussion of the Roman denarius silver coin which remained relatively stable at 95% purity from introduction at 211BC to 64AD, but then rapidly declining to 5% silver by 274AD; in each case the leadership extracted value when initiating a devaluation because prices were briefly sticky and the Cantillon effect stayed in place.
41ff On the gold to silver multiple holding at 10x-16x, but lately in the 20th century and thereafter more like 50x as silver lost much of its historical monetary premium relative to gold; silver's only minor advantage was its better divisibility.
Chapter 4: A Unified Theory of Money
43ff The two camps regarding the definition of money: the Commodity Theory camp and the Credit Theory camp; brief discussion here of Adam Smith and his description of commodity money; also on Smithing writing about how it would be easy to have a social credit exist between the butcher and the baker; in Adam Smith's example it is a naturally emergent phenomenon to solve the double coincidence problem; however he was wrong to suggest that barter or a flexible social credit system predated money, it was the other way around.
48ff In fact Alfred Mitchell-Innes in his 1913 essay "What Is Money?" flips Adam Smith's butcher, baker and brewer example and talks about how they could exchange credit based on "a general sense of the sanctity of an obligation" in other words a type of credit. ("Thanks for the meat, here's a credit claim for five loaves of bread, which you can trade to someone else if you want to and I'll honor whoever redeems it.")
51ff On how natural money links up gaps in a credit based system: for example, if you provide a niche service like surgery that's high value but not fungible like breadmaking, or if you want to transfer wealth into a different community and take your wealth with you (there would need to be some form of wealth that can allow a transfer of value this way); also small social credit systems don't scale. Note also that Mitchell-Innis was totally wrong when he argued in 1914 that if we de-peg money from gold the value of money would go higher, the exact opposite happened obviously.
53 Note the argument here that the ability to debase money contributes to the likelihood of war; it allows rulers to handle greater cost with less risk to their power structure, and then defer/delay those costs out into the future in the form of inflation.
54 "...proponents of the credit theory of money... generally rely on the assumption of having an unbroken chain of highly competent and altruistic administers of the public ledger. That is an assumption that has gone unrewarded time and time again, in culture after culture, century after century."
57 On a unification of the credit and commodity theories of money as a ledger theory of money: the difference is who or what authority is trusted to maintain the ledger, In a high-trust scaled environment (a well-functioning centralized state for example) people would be okay using a centrally controlled credit ledger, but where trust is low a trust-minimized ledger such as commodity money would be used instead.
Part Two; The Birth of Banks
Chapter 5: Proto-Banking and the Hawala System
61ff On the development of the suftaja, a sort of letter of credit used throughout Africa, Middle East and along the Silk Road by merchants as early as the 8th century [AD]. Basically using a merchant in one city who had a relationship with a merchant in a second city; the first merchant issued a type of "travelers check" that could be redeemed with the merchant in the second city.
63ff Description of the hawala system, basically a high-trust network of credit-issuing individuals who settle up/net everything later as people move through their network, transferring money.
66ff Interesting blurb here on the Knights Templar; during the 12th century they operated an extensive network assisting Crusaders: nobleman would deposit valuables with Knights Templar in Europe and receive a specialized note in return, that note could be redeemed with different Knights Templar upon their arrival to Jerusalem.
Chapter 6: The Innovation of Double-Entry Bookkeeping
69ff 1494: Luca Pacioli of Italy, the so-called "father of accounting" who described double-entry bookkeeping in his book Summa de Arithmetica; this revolutionized banking and accounting throughout Europe; it allowed reconciling one asset with another liability and gave rise to modern banking.
71 On the three primary steps between proto-banking and full-service banking based on negotiability or the transferability of a paper instrument to a third party; the first level of complexity involves non-negotiable paper representing a deposit of gold in a bank; second, that paper can be made negotiable if the bearer who owns its signs it over to someone else; although this requires a more complex and trusted financial network because there's more counterparties; the third step uses a banknote that is a bearer asset with no one's name on it, so it's negotiable among anyone and this requires large and widely recognized institutions to trust that bearer paper. This third stage is a form of abstraction, and it makes gold much more portable, liquid and divisible when it's in paper form [with tradeoffs obviously].
73ff On the "slide" toward fractional reserve banking: There will be competition for deposits; there will be banks that lend a greater and greater fraction of their reserves out; the system will develop an inherent instability; note also that the inherent instability also drives an incentive to pull your money at the first whiff of insolvency because later attempts at withdrawals may get nothing.
77ff Who controls the ledger in this case? Each bank controls its own sub-ledger, but you could argue that the government partially controls the full collective banking ledger because it can order banks to do things: it can confiscate people's deposits, it can persecute individuals, or it could even force all banks to hand over their gold and give a paper IOU to depositors in return [see for example the Bank of Amsterdam, which called in all gold nationwide, forcing everyone to exchange it for paper: Nik Bhatia discusses this in his excellent, short book Layered Money, this is seen by many as the (accursed) birth of the first central bank]. Note also this quote: "It's easier for a government to get the gold from a handful of banks than it would be to get it from each individual household."
Chapter 7: Free Banking vs Central Banking
79ff Two types of models for banking; with free banking and fractional reserve lending used successfully in the 18th and 19th centuries in Canada, Switzerland and Scotland, also in the United States from the 1830s to the 1860s; note that this last example was a period that people [regime apologists and captured politicians like Elizabeth Warren] point at as examples of the "failure" of free banking as a concept because there happened to be a lot of bank failures during that short period.
81ff Contrast this to central banking, where the national ledger is centralized as well as the banknotes; also, rather than individual banks holding gold as reserves in their own vault, they hold reserves as entries on the central bank's ledger. Thus the "Who controls the ledger?" question in a gold-backed free banking system means you have much more distributed/decentralized control: both from nature/geology [getting gold out of the ground] and the individual banks; by contrast, in a central banking system with gold backing there's still a natural/geological scarcity component, but it becomes more and more removed from the everyday operation of the system because the individual bank reserves are stored on the central bank's ledger rather than held directly in local vaulted gold.
84ff Good discussion here of American monetary history: describing a systematic centralization over time; note also the deep controversy about having a central bank when the First Bank of the United States (a pseudo-central bank) was established in 1791, set up with a 20-year charter [which Andrew Jackson made sure not to renew]. Likewise the government had specific coins that It produced, but it left banknote production to individual banks, thus the banking system couldn't really create money out of thin air the way it can today; likewise banks also were required to honor banknote redemption in precious metals on demand.
85 Bank branching was also not allowed in the early United States, so banks were therefore unable to diversify deposits and loans properly across geographies; thus bank runs would be more likely in local geographies.
85ff Centralization of American banking under Lincoln in the 1860s with the establishment of National Banks with the National Banking Acts of 1863 and 1864; issuing of a national paper currency; also requiring banks to buy government bonds and deposit them with the Comptroller of the Currency; also in 1865 legislation that essentially taxed state banknotes out of existence giving national banknotes a near monopoly.
86 Post the Civil War a multi-decade disagreement between creditors and debtors emerged over what would be the money supply, what the dollar would be pegged to: gold or silver. Basically it was a debate between savers and creditors, people who were long dollars or short dollars. [This is another takeaway you want to think about: where is the power structure today? It is in the hands of people who are short dollars, thus inflation and debasement will likely be the result of the incentive structure.]
87 FDR's gold seizure executive order; then the Gold Reserve Act of 1934, which basically caused the public to hand over enormous amounts of gold to the US government in exchange for paper currency and bank deposits [just like the Bank of Amsterdam!]; and then the US immediately devalued the dollar from $20.67 to $35 per ounce of gold.
90 Another useful insight here: that in an environment of structural inflation this dramatically enhances bank power because it makes it necessary for everyone to deposit the bulk of their savings in banks to earn interest, and this increases the power of the government to surveil the system, freeze funds, seize assets, brick you out of the financial system, etc. This is totally different from a hard money system where you don't need so much centralization, you can have distributed holdings of gold, there's far less counterparty risk, less systemic risk, you have much more individual financial sovereignty, etc.
90 Also note the significant increase in surveillance and control with the 1970 Bank Secrecy Act coupled with structural inflation, thus the $10,000 transaction surveillance threshold was never adjusted for inflation [!!!] so without additional legislation the surveillance mandate of the system has dramatically expanded; the whole thing is self-sealing because now there's less incentive to hold banknotes/physical cash, there are fewer banknotes outstanding, it's much more costly and inconvenient to hold them or use them, and of course everybody throughout the system is surveilled and controlled. [As disgusting as it is, you have to admit this is a very savvy, very subtle system of control, most people never perceived how it crept everywhere since the 1970s. This is the water we are in and the frog has been boiling for a while now.]
Chapter 8: The Speed of Transactions vs the Speed of Settlements
93ff On speed of transactions being limited by human travel speed for most of history; with the invention of the telegraph this changed dramatically; gold and silver "had to be increasingly abstracted to keep up."
95ff On William Stanley Jevons and his understanding of the centralization effects of increasing abstraction and efficiency of global commerce, grasping London's increasing role as financial network effects took place; most transactions could be settled collectively in one gigantic netting out of transactions; and the movement of metallic money was almost pointless: he called it "a system of perfected barter." He also identified the structural problem of more and more abstraction away from gold leading to more and more claims on gold than the actual gold available, thus the system became much more unstable as a result.
99ff Ultimately, with World War I the gold standard globally collapsed and never recovered, leading to what Lyn Alden calls "the only time in history where, on a global scale, a weaker money won out in terms of adoption over a harder money... The combination of legal tender laws, taxation authority, and greater speed has allowed fiat currencies to outcompete their slower but scarcer precious metal counterparts all over the world in terms of usage... Monetary ledgers became increasingly detached from any sort of natural constraint or scarce units of settlement..."
101 Monetary theorists then begin wondering why do we even need these metals; a "credit theory of money" started to take hold; see also George Friedrich Knapp and his 1905 book The State Theory of Money, founding the theory known as Chartalism, sort of proto-Modern Monetary Theory.
102 On the [fascinating] idea that "World War I never really ended" in the sense that once you had central banks transacting electronically or via paper IOU credits you had a mechanism for debasement that was far more efficient than the very slow mechanism of physical debasement of coinage that existed before. It takes a long time to gradually debase a whole system of metal coinage, whereas in the post-1914 system governments suddenly were able to do it at the stroke of a pen or with an adjustment of the ledger.
102ff Discussion of the English pound sterling (equal to 1lb sterling silver), one of the world's oldest continuously used currencies: it had a very slow debasement rate over 9 centuries losing about 2/3 of its value from the 8th to the 18th century, usually in small stepwise bursts from time to time; then in the 1800s Britain switched to a gold standard, and then World War I caused the decoupling of the pound from gold, now it is worth less than 2 grams of silver. More broadly: the above-ground gold supply increases about 1.5% per year but the broad money supply has grown at 6-12% since 1960; many developing countries had double-digit or hyperinflation money growth rates during the last several decades.
104ff More comments here on the technological advantage of modern financial systems dominating gold; thus it's a "technological inevitability"--this is a nuanced view here that Alden has that's interesting; also on Switzerland being the last country to drop the gold standard in 1999; thus Alden makes the argument "Something that existed in the past but does not exist anywhere in the present likely has a lack of fitness." Also people turned to other forms of savings, like real estate or equities. "Even when fiat currencies fail in a country, people in that country tend to turn to a newly issued fiat currency or use another country's fiat currency--such as dollars--rather than falling back to gold as a medium of exchange."
105 "Nature's ledger (gold) has robust parameters for supply and debasement but doesn't move and get verified fast enough in the telecommunication age. Mankind's ledger (the dollar) moves and gets verified fast enough but doesn't have robust parameters for supply and debasement. The only way to fix the speed gap in the long run would be to develop a way for a widely accepted, scarce, monetary bearer asset itself to also be able to settle over long distances at the speed of light." [Hence, Bitcoin.]
Part Three: The Rise and Fall of Global Monetary Orders
"By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some."
--John Maynard Keynes Essays in Persuasion
Chapter 9: Printing Money for War
109ff Quite striking and scandalous story here about how the UK government totally lied to its people (and kept it secret for a century) that their efforts to raise money through war loans in 1914 flopped, and it ended up that the Central Bank loaned fiat money created out of thin air (remember this was a gold-backed era, so this type of central bank intervention was unheard of and almost certainly illegal in those days) to two of its employees (!) who then turned around and bought up all the oversupply of bonds to make up the shortfall. The government couldn't afford the embarrassment of having a flop of a capital raise and so they fake their way through it with fake money. It's unbelievable that this was this blatant!
112ff The price index more than doubled over the next five years and England was forced off the gold standard. [Heuristic: war means inflation.]
114 "The losing sides of the war mostly saw their currencies hyperinflate away, while the winning sides of the war merely had 'very high' inflation rather than outright hyperinflation." Note also that because the UK was the world reserve currency at the time they exported inflation to many other countries especially those coerced into holding UK government bonds because of the colonial system, so England devalued not only their own citizens' savings but many other peoples' savings worldwide. "The speed and ease with which this occurred was only possible due to the abstraction of gold as money. If people in nations were primarily holding physical gold or silver as money, it would be much harder to pry that money from them and channel it toward the war. ...because people and nations were merely holding paper claims and bank deposit claims for gold, promises could be quietly severed overnight with a stroke of a pen, while the consequences could be dealt with later and spread over time."
115 The gold standard "failed practically everywhere all at once"; also: "a centralized gold-backed paper currency and banking system is easy to manipulate, since currency can be printed first and the consequences such as the inevitable inflation and breaking of the gold peg can be dealt with later."
Chapter 10: The Bretton Woods System
117ff Mini-history lesson here of the Depression; of the money printing during and after the bank holiday period; then the gold seizure EO; then the dollar devaluation once the gold was seized; then the "marginal gold peg" era of 1933 to 1971.
121 "A global monetary order is, at its core, a description of how trade will be settled between countries who don't necessarily trust each other's public ledger. To the extent the technology allows them to, governments can enforce the usage of their own centralized ledger systems on people in their country, but they can't really force other countries to accept the validity of those systems."
123ff On the Bancor system, Keynes' idea; on the dollar-based Bretton Woods System which won out; on the gradual pulling of gold out of the US; on greater and greater quantities of "broad dollars," both in the USA and in the Eurodollar system due to fractionally reserved dollars; a rush to redeem those dollars for gold at the same time, where the US central bank had less and less visibility or control of the dollar supply; the whole system became completely unconstrained by gold reserves in the US, but yet under the Bretton Woods system each one of those dollars in a foreign country's hands was theoretically redeemable for gold.
127 "By the late 1960s, the system was already broken, and in 1971, President Nixon officially ended the redeemability of dollars for gold." Note also that initially he said it would be temporary, of course it wasn't [these things never are]. Bretton Woods took only about a quarter century to break down, and the world entered the modern fiat currency regime in 1971 when currencies are not redeemable for anything.
Chapter 11: The Rise of the Petrodollar
129ff Now in an era where no currencies are backed by anything; on the US persuading Saudi Arabia and other oil producing nations to accept dollars for payment and hold their dollars in the form of US Treasury securities as a savings vehicle. The components of the trade here 1) the US would buy a lot of oil from Saudi as well as sell them a lot of military equipment and aid; 2) the US military would ensure the Strait of Hormuz would remain open for global oil trade; 3) Saudi Arabia would take these "petrodollars" and invest them in US Treasuries, which would help finance US deficit spending; 4) likewise Saudi Arabia would only sell oil to other countries in dollars as well, which would reinforce global demand for dollars and help keep it the world's international medium of exchange. Note that this deal was at the time totally secret, and the Treasuries were sold to Saudi Arabia mostly off the record, mainly to enable the US maintain its relationship with Israel as well as enable Arab relationships with other Muslim countries. [Basically we also played Saudi off against Iran, their main rival.]
133ff On the US invasions of Iraq due to the conspiracy theory that it was selling oil in euros and currencies other than the dollar. Also 2001: Venezuela talked about switching to selling oil in euros and within a year there was a coup attempt against Chavez followed by hyperinflation. [Oh, I'm certain all this stuff is just a "coincidence"...]
136-7 "The United States maintains its fiat ledger, and other sovereign nations attach themselves to the United States' ledger by holding a considerable amount of dollars, either in the form of US bank deposits or US Treasury securities... Putting this together, the world basically operates on a two-tier financial system. Most people on the bottom tier are stuck paying and saving in whatever their local currency is, and out of 160 currencies, most are not very good... On the second tier, meanwhile, the export companies, import companies, wealthy class, and central banks of these countries use dollars and other major currencies to interact with global markets. The leaders of these countries, who frequently devalue the savings of their people, often maintain dollar-denominated or franc-denominated or euro-denominated accounts for themselves in offshore banks and tax havens rather than subject themselves to the ongoing currency weakness that their own people routinely experience."
Chapter 12: Pushing Chaos to the Periphery
139 On monetary neo-colonialism, where wealthy nations push inflation and volatility onto developing nations that are forced to attach themselves to the ledgers of the advanced nations.
141ff On how the dollar has routine 50% or 100% increases in value relative to other currencies: for example in the mid 1980s, which caused debt crises all over Latin America; see also in the late 1990s which caused debt crises in Asia and Russia; then in the early 2020s (right now), debt crises spurred by dollar strength happened in Turkey, Argentina, Lebanon and several African nations. When the US tightens monetary policy, it sends pain to the periphery.
142 And then by contrast when the US weakens the dollar, this harms creditor nations holding large dollar surpluses, like China or Saudi Arabia, extracting a form of tribute from these countries.
143ff On criticisms of the IMF and the world bank, also criticisms of the kinds of austerities and repressions required of developing nations in order to receive funding and support from these institutions; note this also makes these countries more "porous" for the major companies of the developed world to go in an extract market share.
146 Various examples of French colonialism in the modern era in Madagascar and Central Africa; on their currency regimes there; on colonial empires and how they structure developing countries to produce export cash crops for wealthy countries but also encouraging the purchase of dietary foodstuffs from developed countries, requiring all of this to be transacted in dollars/euros, which necessitates access to dollars or euros. These are additional aspects of "neocolonialist value extraction."
Chapter 13: Heavy Is the Head that Wears the Crown
152ff The USA sits at the core of the system as issuer of the world reserve currency; it gets advantages, but also drawbacks: "The very power granted to the reserve currency issuer is also what, over the course of decades, begins to poison it and render it unfit to maintain its status." Discussion here of the elements of the problem; defining the trade balance, current account balance, capital account balance and net international investment position; basically countries that produce more than they consume over time end up owning a lot of foreign assets, including other countries' gold, real estate, government bonds or business equities. Countries producing less than they consume end up being owned by other countries, more or less.
154ff The author goes through a hypothetical example with Brazil and Japan, where Japan originally owns a larger and larger stake in Brazilian real estate and Brazilian companies, either as lender or equity holder.
157ff Describing the drawbacks to the dollar-based reserve currency system, which at first seems great for Americans, but in reality causes structural trade deficits, causes manufacturing to leave the US, causes a loss of manufacturing expertise in the US over the long term. [See the discussion of this also in The Collapse of British Power.]
160ff On Luke Gromen's research, arguing that the petrodollar system most likely played a significant role in the US winning the Cold War and boxing in the Soviet Union economically; but currently this system more of a liability to the USA because it is causing us to lose industrial competitiveness--and this eventually leads to a loss of military competitiveness. The benefits accrue to the established elites of the United States, as well as to foreign elites of the major export nations to the US, while working class American workers are harmed, paid lower wages. Note also currency holders of developing countries are harmed as well.
162ff "Unfortunately, most empires, once they reach their apex, don't pull back gracefully and positively... Large organizations in general, including those governments and corporations, rarely disrupt themselves... Empires usually end up pivoting late from the position of weakness, rather than pivoting early from a position of strength."
163ff More discussion here of the Iraq and Afghanistan Wars after 9/11, and how they were paid for indirectly through inflation and dollar dilution, in contrast with prior conflicts in the United States.
166 "Over two decades since the War on Terror began, it's clear by almost every objective analysis that this was a failed war, and failed wars are what put empires at risk... Much like World War I, most of this military engagement didn't need to happen, and mainly happened anyway due to the availability of money printing and opaque financing by a small number of people in seats of imperial power, so that the costs could be abstracted away from the public."
166ff On China's decision to not play along with the petrodollar system and instead take some of its Treasuries that it accumulated and use them for the Belt and Road Initiative to invest in some 150 countries around the world; making dollar denominated loans in these countries to build infrastructure, building a sort of 21st century version of the same neocolonialist financial arrangements the US and Europe used in the 20th century.
169 On the mistaken idea that you need to have one world reserve currency: the author thinks the 19th and 20th centuries were anomalous and that in the future there will be a multipolar neutral reserve currency system where no one country is big enough to issue a fiat currency that the whole world is forced to use.
Part Four: The Entropy of Fiat Ledgers
Chapter 14: The Modern Financial System
175 [Money quote here] "The following chapters together show that the financial system in its current form is designed in such a way that 1) the money supply continually inflates, 2) purchasing power is gradually siphoned away from savers and toward arbitrageurs who sit near the source of money creation, 3) the system rewards large and well connected entities at the cost of small and poorly connected entities, 4) liabilities gradually shift from the private sector to the public sector to keep the system from ever clearing out debt, and 5) this process suppresses volatility for a while until most of it comes out all at once."
175ff Describing the Federal Reserve system as a set of nested ledgers: a large central ledger controlled by the Fed with smaller ledgers built on top of it.
178ff Note that the system is circular, and any financial assets are themselves liabilities in the system, a sort of turtles all the way down situation; this differs from the pre-1913 system where the system was built on gold and was "a series of nested claims that ultimately represented the ability to redeem a certain amount of gold." Gold is an asset for the holder and it is not a liability for anyone else, unlike a Treasury security or a dollar. [Note: likewise, Bitcoin is also an asset for the holder and not a liability for anyone else.]
180ff On the Fedwire system and its transition to FedNow, which was rolled out in 2023, evolving from batching transactions at the end of day versus batching those transactions in real time; this enables greater surveillance of the money system and greater granularity in that surveillance.
Chapter 15: How Fiat Currency Is Created and Destroyed
185ff Base money versus broad money; base money is the foundation of the fiat currency system consisting of 1) physical currency and 2) cash reserves held by the commercial banking system at the Federal reserve; on the hard-coded demand for US Dollars embedded into the financial system: tax payments, cross-border trade, most commodities are denominated in dollars, anyone who wants to interact with the US banking system needs to use dollars as a unit of account, etc.
190 On the Federal Reserve's various monetary policy tools to influence the size of the broad money supply.
192ff On how a high ratio of broad money to base money is generally not a problem in a healthy banking environment, but it becomes a huge problem when certain banks don't trust each other due to insolvency risks.
194ff Various examples of bank reserve accounting: one where Mary buys a car from Sarah and Mary borrows from her bank; a second example where the Federal reserve purchases illiquid assets like mortgage loans from the banking system, paying for them with new liquid assets, reserves, that are also paid into the banking system. Note that quantitative easing in this form is not necessarily inflationary, it's just internal to the banking system and is technically really only "anti-deflationary" (by preventing bank collapses).
206ff An example of non-bank financed "helicopter money" and stimulus checks; the latter is outright money printing which drives inflation directly, because money was injected into the system without being extracted from anywhere else in the Reserve system; note that the Treasury and Federal Reserve can perform this repeatedly if they want, although it will drive major inflation; the resulting inflation comes from the extent to which people take that money and use it to spend rather than leave it as deposits; note this kind of intervention is also inflationary for asset prices.
216ff Key observations:
1) Banks create new deposits by making new loans, lending creates deposits, although it doesn't increase the amount of base money in the system; it drives the money multiplier ratio which is the ratio of broad money to base money. It's not quite money printing, because the bank lending is constrained by default risk, liquidity requirements or regulatory standards.
2) The Fed can create new bank reserves, but it can't force banks to make new loans: technically it can print money but it doesn't necessarily increase the ability of people to consume more or increase the ability of banks to lend more, therefore this doesn't (necessarily) drive inflation.
3) The US Treasury can deficit spend, which creates deposits in the system, but those deposits are often crowded out or reduced by purchasing of assets or Treasury bonds, so this is technically not money printing, and it is also not (necessarily) inflationary.
4) However the Treasury and the Fed can work together to increase deposits (broad money) and bank reserves (base money) without extracting deposits from elsewhere in the system: here the money supply grows whether banks lend or not; they can also literally give people "helicopter money" which increases people's net worth: this is the most inflationary form of money printing.
5) Finally, quantitative easing can be anti-deflationary and not inflationary if it prevents banking failures and reliquifies the banking system; but large deficits funded by quantitative easing will usually be inflationary, because it pumps money directly into the economy via increasing the broad money supply.
Chapter 16: Pricing as a Mechanism for Organization
221 On analyzing a monetary system from the standpoint(s) of users of the money and issuers of the money, two groups with different goals! [This part is extremely interesting, you have to think about both sides and both agendas in order to really grasp the system's logic.] "Most of this book is written from the perspective of the user, so let's take a moment to explore fiat currency from the perspective of the issuer." Users want money that appreciates in value, that is easy to hold, that's private and impossible to freeze or confiscate; In contrast, a currency issuer wants to issue money to smooth out near-term volatility, that pulls demand from the future into the present (driving more GDP), that is easy to surveil and easy to freeze or confiscate, and also gives the issuer lots of flexibility to spend money when perhaps no one wants to finance them.
223 On how currency issuers/governments typically run deficits most of the time: it keeps them in office, it pushes the liability payments out into the future for a different administration; likewise during a crisis the fiscal authority can always print money in a fiat currency system when needed, much like England did during World War I when they had a failed war bond auction in 1914.
224 Also if you believe that your central bank can be a counter-cyclical force [note that most of the time central banks drive worse cyclicality, although they always believe they are helping counter or smooth the economic cycle] you can therefore smooth or reduce economic contractions or even fix bank failures at the cost of a little bit of monetary dilution shared by everyone; this is how top-down economic manager-type system operator personalities tend to perceive the risk-reward balance of interventions. [We are all delusionally optimistic about how much we "help"...]
227 On looking at this from the lens of technology: if a central bank operates a ledger system of course they're going to actively manage it! And they will likely make mistakes. Thus is the system we have, whether we like it or not, "until we develop and adopt a better ledger system."
227ff On the idea of "price stability" which is basically a propaganda euphemism for "a gradual slow loss of purchasing power over time"; central banks will expand or contract the money supply in order to maintain this hypothetical "price stability"; note also, interestingly, Lyn Alden questions whether price stability is inherently good: perhaps it hides volatility that we would be better off seeing.
229ff On price signals, a distillation of information that tells you what to do: either to supply or buy more of something. A price doesn't tell you why it is the way it is, but it produces the incentives to respond to that price; discussing central planners' desire to override pricing information and the natural coordination that pricing information normally produces; then moving to the "price" of money, or the reliability of the measuring stick that everyone's using; creating new money is basically a breach of contract for savers and the stability of the price of the asset they're saving in. Likewise, rapidly destroyed money does the opposite for them and breaches contracts for debtors; so the question is not whether money should be hard or weak, but how elastic or arbitrary its supply should be. In other words it's a question of who controls the ledger.
233ff On distortions introduced by price inflation; affecting multi-month or multi-year supply agreements, requiring a need to factor inflation into contracts or business plans, especially if inflation is rapid; on Egypt devaluing its currency in 2016 by half, and then doing it again in 2022--and again 2023! On how regions with persistent double-digit inflation tend to be very unproductive economically, they tend to be in disarray. All negotiations are more difficult; all contracts are more difficult to maintain, "the public ledger is broken, and by extension everything becomes broken."
236 On the need for constant price inflation, see the feds 2% target; Lyn Alden says here if we called it a "debasement target" instead of an "inflation target" it shows how silly this entire notion is. Various [fallacious] arguments from central bankers for why inflation is necessary: that people will delay purchases indefinitely (which is observably false), that excess savings needs to be discouraged (the so-called paradox of thrift), that people need to be kept on a constant treadmill of consumption and borrowing (yuck), that deflation is feared by policymakers because it's terrible for a highly leveraged financial system like the one we have (but yet our system is set up to encourage leverage in the first place!). [These arguments are all obviously in the state's interest, but none are in the people's interest.]
241ff Interesting nuance here where truly scarce things like luxury waterfront property or fine art go up in price at the same rate as the money supply, while semi-scarce things like gold, beef, oil or the median house price tend to go up by 4 to 5% a year, a little less than money supply growth, because we get better producing these things due to technology over time; also note that non-scarce things tend to have very low or even negative inflation rates because we get significantly better at making them, things like t-shirts, grains, electronics, etc.
243ff On how it's better to monitor the broad money supply rather than pay attention to government inflation statistics, because that gives you a better representation of the price increases for things that are truly scarce.
Chapter 17: The Financialization of Everything
245 "In the absence of good money, everything else that has some degree of scarcity gets monetized instead."
247ff Also people start to use debt to acquire assets, and also you start to financialize utility assets like shelter/housing. People want to hold anything other than cash even at inflated asset valuations; in other words everything starts to acquire a monetary premium.
251 Discussion here of capital gains taxes on assets that simply kept up with inflation, another way that governments and monetary authorities double dip on individuals' wealth, and showing why governments have an enormous incentive to let inflation run hot because they get a bigger share of transacted wealth.
253 Interesting chart here showing where the leverage "sweet spot" is depending on the hardness of your money. When you have a very hard money, there's not a lot of incentive to borrow; when you have very easy money there's not a lot of incentive to lend; but when there's moderately easy money lenders have an incentive to lend a little bit longer term, using lower cost short-term financing, and they can also lever up the difference like a bank; borrowers likewise have an incentive to use leverage to acquire assets that will hold their value better than the money supply. All of this of course adds instability to the system. See photo:
Chapter 18: Beneficiaries of the Cantillon Effect
255 Discussion here of monetary dilution as an opaque bottom-up wealth distribution mechanism from workers to the wealthy; and it's not understood well enough by the people it extracts from. [All systems of control work best when they are invisible to the people controlled!]
260 Interesting point here about the airline industry, and how they were bailed out during COVID, whereas a prudently-run airline that didn't overlever, that didn't buy back shares or pay dividends, was punished for its prudence because of the later actions of the government and making cheap money available to bail out the less prudent airlines.
260ff The money supply increased by approximately 40% between 2020 and 2022. [!!!]
261ff On the Cantillon effect and how it is heightened during a fiat currency system; on the tremendous benefits of being close to the source of money creation, as well as having access to capital markets and less expensive credit; on the enormous benefit of having political access to bailouts. And then the winners in the system become the biggest political donors and maintain access to the money printer. The system overall starts to select for larger entities over smaller and it tends to centralize wealth and influence over time.
Chapter 19: The Long-Term Debt Cycle
266 On how civilizations (or more specifically segments of the people within them) tend to exponentially accumulate wealth and debt. "Credit is a human construct and begins to look especially arbitrary to people when it was primarily accumulated by past circumstances and ancestors." Hence you can get violent revolution if the wealth and debt numbers get too out of whack.
267ff On periodic debt jubilees, dating back to Babylon and Hammurabi; On Will and Ariel Durant in their book Lessons of History concluding that concentration of wealth is natural and inevitable, thus debt jubilees are a necessary part of civilizational sustainability. Examples given here from Babylonian civilization, Israel (in Deuteronomy). See also Solon of Athens in 594 BC: "The rich protested that his measures were outright confiscation; the radicals complained that he had not redivided the land; but within a generation almost all agreed that his reforms had saved Athens from revolution."
269 Interesting take on this from Alden, talking about adapting this idea to the modern day, also on how people typically have a linear perspective not an exponential perspective (thus the implications of compounding debt and wealth are not perceptible to the powers that be). "The wealthy find out that without broad societal agreement, their fragile claims on a highly interdependent society don't amount to much. The poor find out that merely taking from the wealthy does not make themselves wealthy in their place. The most productive discussions seem to occur between those who appeal to the other side's rational self-interest."
271ff On business cycle management from policy makers, when they can make changes to the base layer of the system; typically deleveraging rarely is allowed to reduce debt levels back to where they started in a cycle, so across multiple cycles the amount of leverage in a system increases over and over again. The system never fully cleans itself.
275 On how the incentives are set up to filter out politicians who would be budget hawks or central bankers who might be gold bugs; even Alan Greenspan (who was a gold enthusiast!) presided over tremendously rising debt levels. [Sadly, systems and bureaucracies have incentives, and they select for the people they select for.] "Combining all this together, the modern economy is incentivized to build a string of several short-term business cycles over the course of decades that result in higher and higher government, corporate, and household debt levels relative to the size of the economy. This can occur until interest rates reach zero (or even slightly negative) and policymakers run out of fuel to encourage more and more credit growth. At that point, something different and bigger happens."
276ff On the 2008 crisis, where the debt to monetary base ratio hit an all-time high of 63x, while the banking system had a 23x liabilities for every dollar of reserves. Both of these levels are much lower now, something like 17x and 6x now; but the policy response that led to this was a massive expansion in the monetary base, in other words they raised the denominator.
281ff "Many people thought that the rapid increase in base money during the 2008 crisis would be hyperinflationary... but they were wrong and in a big way." This is because it was mostly banks that were bailed, out not everyone else; thus broad money didn't really increase that much, but base money did; thus when broad money stays relatively normal (like it did after 2008) then the average person doesn't have more dollars to spend, so 2008 was anti-deflationary rather than outright inflationary. Note however the inflation eventually did come, and an analogous cycle was the 1930s followed by the 1940s where a longer term debt cycle unfolded and the excess debt starts to move into the government sector, and then the government runs itself into an inflationary debt spiral. Thus the 1940s and the 2020s will map to each other with deficit-driven inflation.
285 Annual inflation peaked at 19% in the 1940s and averaged about 6% between the early 1940s and early 1950s, yet the Federal Reserve kept interest rates low and expanded the monetary base dramatically. "Anyone holding cash or bonds was sharply devalued throughout the decade."
286 Interesting to look at some of the numbers on the US federal debt, which went from $16 billion to $29 billion between 1930 and 1935 and then to $43 billion from 1935 to 1940 (nearly a 50% increase); people thought those levels were high, but then from 1940 to 1945 the debt went from $43 billion to $259 billion, up more than 500%. [You wonder what the debt growth roadmap will look like this time around, now that we are at $36 trillion...]
287ff Interesting discussion here on the differences between the 1970s, the 2020s and the 1940s; when you have broad money supply growth and rapid growth in bank lending (this was due to the 70s demographics bulge) the central bank policy tool to restrain inflation is to aggressively raise interest rates; but when large fiscal deficits that are being monetized by a central bank leads to inflation you can't really raise interest rates aggressively because the higher interest rates cause even larger deficits because interest expense goes higher; worse, it produces even more money creation because the large debt base produces more interest income (and thus more money) to debtholders. Unfortunately the result will be [has to be] a partial default in the form of inflation over time.
288 See photo below for what financial repression looks like: keeping interest rates below the inflation rate for an extended time; this is what happened in the 1940s and 1950s, and it is likely to happen again. "It was basically a debt default and restructuring that occurred by redefining the dollar itself rather than by nominally defaulting on the debt contracts... The smart thing to do in that environment is to short the currency by taking out a loan or issuing a bond with a low interest rate and a long duration and buy something scarce with it."
289ff In order to prevent excessive debt levels and people using this technique, the nation state will use other financial repression methods like discouraging private sector borrowing, using capital controls or lending restrictions to make sure people hold the currency and bonds while they are devalued; meanwhile, interest rates are kept lower for the government than the private sector.
291ff "Could this have turned out differently? Around the margins it could have, but for the destination I don't think it could have. In addition to the historical human tendency to think linearly even as debt compounds exponentially, this time the generational debt accumulation was empowered by the fact that the invention of telecommunications systems allowed commerce to occur at the speed of light while any sort of hard money could only settle at the speed of matter."
Part Five: Internet-Native Money
Chapter 20: The Creation of Stateless Money
295 Quoting Friedrich Hayek: "I don't believe that we shall ever have a good money again before we take the thing out of the hands of government. Since we can't take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something they can't stop."
296ff Various innovations in computer science that ultimately led to the foundation on which Bitcoin was built; David Chaum and Digicash; interesting blurb here about HTTP 402 payment required, the 402 error code was reserved for future use with some sort of digital cash; Adam Back and Hashcash in 1997; Nick Szabo and Bitgold; on Hal Finney, who incorporated both into a 2004 invention called Reusable Proof of Work; ultimately leading in 2008 to Satoshi Nakamoto and his Bitcoin whitepaper.
299 "Governments are good at cutting off the heads of centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own."--Satoshi Nakamoto.
299ff Extensive description here of bitcoin's birth and operation; how it's decentralized, costly to attack, enables you to have an asset that is not someone else's liability, and carry it with you in the form of your private key. It also breaks the custodial monopoly over fast, long-distance payments [which is an insight I hadn't really thought about] and thus it does a better job solving the technology differential between speed-of-light transactions and slow hard money transactions that Lyn Alden talks about elsewhere in the book.
301 "If I were to describe in one paragraph why money has been broken around the world for so long while almost everything else has improved substantially (energy abundance, technology abundance, and so forth), it's due to this gap between transaction and settlement speeds that the telecommunication era created. For a century and a half, the world has been stuck in a local maximum that has required and incentivized ever more complex forms of centralized abstraction to bridge that gap."
301ff Basically gold worked during peacetime, but it failed immediately after a major war broke out; the Bretton Woods system was even more flawed because of even greater levels of abstraction; and the modern system of 160 or more constantly devaluating fiat currencies is highly flawed "due to having no inherent grounding in scarcity."
302ff Extensive comments here about the technology and mechanisms of Bitcoin; on miners, validators, final settlement, the difficulty adjustment, soft forks and hard forks, halvings, etc.
310 "While some of this [Bitcoin's details] may sound complex at first, it's not nearly as complex as the step-by-step details of how the global banking system works under the surface, including the complex handshaking that goes on between financial entities..."
311ff Note the incredibly important nuance of multisig technology, where you can take a Bitcoin private key and break it into three or more pieces, a type of custodial arrangement that you can't possibly do with gold or cash or other types of non-encrypted money.
Chapter 21: Bitcoin's Path of Monetization
315ff Asking the question of what is it worth to have the ability to send value a long distance very quickly without a trusted intermediary? In order to ask this you have to think about looking at gold again and its assets and liabilities. Bitcoin is a better bearer asset, easier to self-custody and easier to send. Also you can go anywhere with your Bitcoin, you can't replicate this with gold at least not in large quantities.
316 "When Wikileaks was deplatformed by PayPal and other centralized payment methods, it turned to Bitcoin donations." Note also that when this happened in 2010 Satoshi wrote about this that he was concerned that this would bring negative attention to Bitcoin, and then days later he ceased posting in public and within a few months vanished totally. [Again, interesting, I had never put those two facts together either.]
318 The various advantages and utilities of Bitcoin caused it to acquire a monetary premium: "When you hold bitcoin, especially in self-custody, what you are holding is the stored-up ability to perform global payments that are hard to block, as well as the stored-up ability to transfer your value globally if you want to or need to." Extensive discussion here on various advantages that Bitcoin provides to people in developing countries that people in developed countries don't seem to grasp, including a good example of a woman who escaped Afghanistan.
323 Discussion of Lightning, a second layer sitting on top of Bitcoin; Liquid, a sidechain; also Stacks (nice to see Stacks get a mention here!).
324 Another interesting insight here, where unlike technologies like electricity or television, a new emerging money can't be adopted quickly in the same way, because if too many people adopt it at once it drives up the price, and this may even incentivize leveraged buyers to enter it, which causes a bubble to form and pop; and then this sets the price back and disillusions people for a while until the next cycle. "Due to the attachment of leverage, Bitcoin cannot realistically have a fast and smooth adoption curve like non-monetary technologies can."
327ff Interesting application of Gresham's Law to Bitcoin: there's a "transactional friction mismatch" with Bitcoin in the sense that it's treated by tax authorities as a capital gain and so it's a higher friction currency than the dollar, thus it's more likely people will hold Bitcoin and transact in dollars, except when there's a practical reason to do otherwise (like say if you don't have banking access or are being censored). "...people who hold bitcoin but don't actively use it as a medium of exchange yet, are still using it as money. They are holding it for its monetary premium and the future optionality and insurance that this portable, self-custodial, supply-capped, censorship-resistant global money provides to them."
328 See chapter 26 for an analysis of risks of the Bitcoin network.
329 Approaches to Bitcoin valuation: $500 trillion of total global assets, $38 trillion in broad money in China, and $22 trillion of broad money in the United States, $10 trillion of gold (actually gold's market cap is now $20 trillion): "it's not unreasonable to expect the network to continue to take more market share, as understanding of it grows and as its user experience improves with new ecosystem developments." "The total addressable market for the Bitcoin network, therefore, includes everyone that might want to hold some percentage of their net worth in a scarce, liquid, and immutable form that can be self-custodied and that is globally portable."
329ff With $500 trillion in global assets every 1% of assets that the Bitcoin network captures would mean $5 trillion in additional market cap in today's dollars (thus with 21 million coins about $238,000 per coin). "As a bullish scenario, it's not hard to imagine that at a mature stage for the network, people around the world might on average want several percentage points of their assets in that form of money."
331ff Implications of a Bitcoin world: on Bitcoin as a transaction medium would not require abstraction the same way gold or base layer dollar Treasury assets would; financial middleman would be diminished in terms of wealth and power, economies would likely be much less financialized [or in the language of Michael Hudson there would be much less of a rake-off into the FIRE sector.]
334: Savings would become much more globally portable; it would also give world oligarchs more geographic discretion on where to operate; it would allow refugees to bring their savings with them; either way, jurisdictions will likely need to compete more to draw in and retain highly portable capital.
Chapter 22: Cryptocurrencies and Trade-Offs
336 "I think it's natural for the market to explore multiple wrong answers to see in practice what the right answers are, and part of what allows me to analyze these concepts is the historical track record of why and how various cryptocurrency projects failed to accrue value." Alden goes through some of the major trade-offs people think exist compared to Bitcoin: transaction throughput, privacy, code flexibility or code expressivity, energy usage, etc. Basically, transaction throughput has an offset with node complexity and centralization; privacy has a trade-off with auditability and liquidity; having smart contract capability has trade-offs with bandwidth and storage requirements of a node and is thus a centralization trade-off; energy use or proof of work consensus is necessary because proof of stake leads to centralization and too much trust required.
338 Quoting Adam Back saying anything you did to improve ["improve"] Bitcoin in one way made it worse in multiple other ways.
340 On critics of Bitcoin who say that it's "old technology" are incorrect: in reality Bitcoin is just strict about trade-offs; also remember that "Protocol-level technologies, once established, tend to last a very long time." See for example IP or ethernet or HTTP, etc. Bitcoin's elegance and robustness come from its backward compatibility and its long-lasting protocol-type aspects.
341ff Any advancements to Bitcoin will be based on layers on top of the Bitcoin foundation; this would allow it to scale to billions of users, produce far higher transaction throughput, etc.; this is the concept of scaling vertically (through layers on top of Bitcoin) rather than scaling horizontally (via changes to Bitcoin directly). An analogy here would be PayPal or Cash App or other banking activities sitting on top of the Fedwire base layer settlement system.
343ff Bitcoin layers: Lightning (micropayment channels), Liquid (federation of entities that "wrap" Bitcoin), RSK, Stacks, custodian layers (like a bank or a payment application), etc.
Chapter 23: The Lightning Network
347ff On broadcasting your transaction to the entire network vs doing a Bitcoin peer-to-peer transaction over a Lightning channel; Lightning, enabled by Segwit, was activated in 2018; explanation by analogy as an open bar tab that you settle at the end of the evening; it can handle micropayments much smaller than credit cards can handle; on startup issues and growing pains, etc.
Chapter 24: Proof-Of-Work vs Proof-Of-Stake
357ff On the trade-off of energy use versus governance and trust in a network; thus proof of stake "partially defeats the purpose of using a blockchain in the first place."
359 On Bitcoin having zero downtime, even though something like half of the global mining network went offline when China banned Bitcoin mining in 2021.
360 On PoW creating an unforgeable, retroactively-secured blockchain; "each new block effectively buries all existing UTXO's under its weight" whereas PoS has no unforgeable history.
361 PoS has certain advantages for a small blockchain; a 51% attack on a small proof of work blockchain does not cost all that much; but a small proof of stake blockchain can only be attacked if the attacker buys up a large percentage of the coins--which drives up the price and makes it more and more difficult to do the attack. Also a proof of stake system can burn coins with transaction fees and offset newly issued coins for stakers. This can also potentially achieve a deflationary monetary policy if users pay significant transaction fees relative to staking payments.
362 On the "Just trust me bro" aspect of PoS: nodes cannot leave and then rejoin and still know the network history for sure, unlike PoW systems. See how Solana went offline five times in 2022 and again in 2023; or how the Binance Smart Chain went offline in 2022; basically these are proof of stake systems that were restarted like an oligopoly, where the major validator operators literally got into a chat room and manually figured out where to restart the blockchain based on their records that they kept. Note also ironically that many proof of stake systems insert checkpoints into the Bitcoin blockchain so that they can rely on its unforgeable history!
367ff On how proof of stake systems tend to boil down to executives and shareholders with an equity-like structure where the developers are like executives and the coinholders are like shareholders, it's more centralized, more complicated.
367ff Interesting discussion here of the surprising lack of scale of the [metals] mining industry in general and of Bitcoin mining specifically; there are certain scale benefits, but they're not that significant, and this is why Bitcoin mining [as well as regular mining] is not that great a business; miners tend not to get very very big or dominant. Thus Bitcoin mining as an industry is less likely to centralize. In contrast, proof of stake is obviously centralizing, and there are perfect scale benefits, there's very little cost to being a validator and incrementally zero additional costs to being a large validator, there's no incremental cost to having more coins (and therefore earning more by staking) and thus gradually increasing your share of the network. And this is a huge structural problem in the long run to proof of stake systems.
370ff On the bootstrapping element of Bitcoin, whereas a proof of state network needs to do an initial coin offering or directly distribute the initial coins ("where did those initial coin holders get their coins from?"), basically in most cases such a project begins as a type of security.
372 "My analysis leads to the conclusion that proof-of-stake systems are not suitable consensus mechanisms for building robust decentralized global money."
375 The author goes through a steelmanning exercise for proof of stake/centralized tokens: for example tokenization of real world assets, trading, other examples, basically she concludes that there could be room for these types of chains but they don't make very good unforgeable money.
Chapter 25: How Bitcoin Uses Energy
381 This chapter basically is contra-arguments against the "boiling oceans" FUD about Bitcoin. See for example the World Economic Forum saying that Bitcoin will consume all the world's energy by 2020; the bottom line here is that bitcoin's energy usage is limited by the utility it provides to users and it primarily consumes stranded energy that would otherwise be wasted.
383 Miner expense or energy expense as a percent of Bitcoin's market cap has been in significant secular decline.
385ff The author works through some scenarios here where Bitcoin, even at a very high price say $20 trillion or more in market cap, with billions of users, could have energy use ranging from 0.6% to 1.0% global energy usage, perfectly reasonable for a network so highly used. Likewise at this point Bitcoin would probably start to eat into the incredible amount of energy used by the global banking system, and thus it would represent increased efficiency and less energy use in aggregate.
389 Even if Bitcoin becomes wildly successful and consumes enormous amounts of energy, under some scenarios that the author goes through it still wouldn't be as large as say for example the aluminum production industry or other industry domains that we don't "become morally panicked about."
389ff Obliterating the "cost-per-transaction" or "energy-use-per-transaction" FUD arguments: Think of it like running your dishwasher whether it's full or not, or using your computer and sending either one email or 100 emails, the cost per email or energy per email isn't relevant because the baseline resource use has a scale factor.
391ff On Bitcoin's use of stranded energy; its ability to go where energy is cheap, free or wasted, as opposed to electricity users who need energy brought to them regardless of the cost. Various examples here including stranded hydroelectric power, stranded natural gas, landfill gas, thinking of Bitcoin mining as a "grid battery" (you can turn on or turn off mining as needed based on peak usage), using Bitcoin mining as a heat source, etc.
403ff And then other advanced new energy technologies, like harvesting thermal energy differentials at different levels of the ocean water; also bootstrapping developing country electricity infrastructure using Bitcoin miners as anchor tenants, thus the energy producer has at least one sure and stable revenue source. It solves the chicken or the egg problem for regions that are not electrified yet. See Alex Gladstein's article The Humanitarian and Environmental Case for Bitcoin.
408ff On various counterintuitive things about energy: energy is much less fungible than you think because of stranding, transmission costs, peak usage idiosyncrasies etc.
Chapter 26: Cryptocurrency Risk Analysis
411 Good rhetoric here as the author pretends to be a bit of a Bitcoin skeptic; she, like many of us, heard about it years before actually buying any, and didn't really understand it at first. [Hence the phrase we all buy Bitcoin at the price we deserve...]
412 The author's reason for hesitation in 2017 was that "anybody could just copy the code and make their own Bitcoin." [This is the same argument I foolishly believed!]
412ff Discussion of the blocksize war, how the big blockers failed and how it answered the question "who controls the ledger" for Bitcoin. On the separate hard forks of Bitcoin Cash and then Bitcoin Satoshi Vision which have a tiny fraction of Bitcoin's market value, neither of them have any of Bitcoin's network effect value.
415ff Discussion of what the author considers to be the key risks to Bitcoin: market dilution [basically he makes the Saylor argument: that once a major protocol comes into an existence and has dominant share it rarely gives up that share, and Bitcoin has been extremely dominant with only Ethereum a very, very distant second in terms of market size and market value]
417ff Risk of critical software bugs: there was a node client with an inflation bug in 2010, Satoshi fixed it with a soft fork; in 2013 a Bitcoin node client update was not backwards compatible by accident and that created a temporary chain split; since 2013 Bitcoin has been 100% up with no downtime; see also 2023, where Segwit and Taproot soft fork upgrades were being used to put graphics into blocks; also there's a year 2038 problem, where computer systems on Unix run out of seconds, but this won't happen until 2106 for Bitcoin; "The point of these examples is that Bitcoin and every other cryptocurrency consists of software code written by fallible humans. Bitcoin is purposely simple by design and therefore maintains a smaller, tighter, and more auditable code base than other cryptocurrencies, but its history is not perfect."
419ff Risk of government bans: Bitcoin represents an existential threat to authoritarian governments, it is very costly to censor, and it sits outside of the banking system. Bitcoin is "the functional equivalent of an offshore bank account to anyone with a smartphone, except without counterparty risk." [!!!] "People often think of Bitcoin competing with dollars and euros and gold, but the more immediate threat is that it competes with the long tail of the 100+ weakest, smallest, periphery currencies first." Governments can also sever the rails between the banking system and cryptocurrency exchanges; they can also instruct banks (or even the banking system entirely) to not interact with cryptocurrency exchanges, this is a form of capital control. Also during the end of a long-term debt cycle when sovereign debt needs to be inflated away, nation states do their best to "force people to remain within the [nation state's inflationary] ledger as it burns down rather than fleeing to other ledgers." Note however people can still exchange value peer-to-peer: see Nigeria for example, where Bitcoin has no connection to the banking system because of government controls; see also FDR's gold seizure executive order that made it illegal to own gold in the United States, note that this was a much higher-trust period with the US government, but yet many people still didn't follow along with this law. [It's interesting that the author doesn't go into the game theory aspect of this here, where countries that welcome Bitcoin holders and users will win both capital and smart people away from countries unfriendly to Bitcoin, there's a game theory element that to me is a very compelling bullish argument for both Bitcoin and for why governments will want to coexist with it.]
423ff Risk of computational threats: there is a sort of a manufacturing bottleneck for top end ASICs used by miners; also the quantum computing FUD: allegedly this can be fixed with a soft fork or a hard fork, but it will increase the bandwidth and storage requirements for nodes and transactions. Also a government could theoretically spend billions of dollars to try to attack the Bitcoin network, this would be almost impossible in the United States politically.
Chapter 27: Stablecoins and Central Bank Digital Currencies
427ff Applications and risks of stablecoins and CBDCs; stablecoins are inherently centralized, you're trusting the issuer; they have some benefits because it turns a bank account into a bearer asset; you don't have to use the banking system to transact; they're used in countries like Argentina with unstable domestic currencies and with a history of seizing dollar denominated deposits in the banking system; the Argentine government can't do much about stablecoins held on a smartphone if the issuer is outside of Argentina; you could also argue that stablecoins represent partial access to the US banking system outside of local banking rails in other countries, a sort of offshore US dollar bank account-type product for regular people.
429ff CBDCs: many countries are interested in making their monetary base entirely digital, with the ledger under their control; also see the disturbing comments from Augustin Carstens [I apologize for saying this but this dude is a truly gross human being on several levels] who is head of the BIS (Bank for International Settlements) who talks about how CBDCs are highly desirable for the nation state authorities because they are so are much more surveillable and controllable than physical cash, plus you can determine the use of the money as well: they permit targeted monetary and fiscal policy, a much finer level of control over the money, different industries could be given different costs of capital, different consumers could be given different quotas on what they spend money on, stimulus payments could be handed out to target groups quickly and precisely, etc. [The whole thing is disgusting through and through.] What's fascinating about CBDC's, as Lyn Alden puts it, is how it underlines the difference between the issuer's perspective and the user's perspective about what is an ideal currency: users want their currency to be free and private and scarce, issuers want their currency to be surveillable, controllable and devalued at a pace of their choosing. Thus CBDCs serve the issuers' perspective farrrrrr more than the currency users' perspective.
433ff On using CBDCs to impose negative interest rates: this forces people to spend and forces monetary velocity higher. You can't force physical cash to be spent but you can do so with bank cash or digital cash by using haircuts or negative interest rates. [Again, gross! This is people's savings, their labor value!]
435ff On Nick Carter's comment that if physical cash were invented today it would be made illegal; how governments have been crafting ever tighter ways to observe and freeze bank accounts and limit physical cash transactions; CBDCs offer a pathway for banks, central banks and states to phase out physical cash and "eliminate the last vestige of transaction privacy that their ledgers offer." See also China in 2021 where it began testing a CBDC that can track or block transactions, can use expiration dates on money to make sure it's spent rather than saved, or can automatically deduct money from or freeze accounts associated with individual entities. Nigeria likewise rolled out a CBDC in 2021, but it had an adoption rate of below 1%; in 2022 their central bank began sharply limiting the availability of physical cash.
438ff On the irony of that Bitcoin ushered in a new era of decentralized and auditable money, but at the same time CBDCs are empowering fiat currency systems with much of the same surveillance and controls that governments previously could only dream of, and this is a risk to physical cash.
Part Six: Financial Technology and Human Rights
Chapter 28: The Degradation of Privacy
443ff It is less and less expensive to violate people's privacy today; with various technologies it can be done without people's knowledge more and more. On how governments always have "because reasons" to abrogate our privacy so as a result "if people want privacy, they must build powerful counter-technologies" to protect themselves, including transactional privacy (the history of your transactions tells you everything about yourself including where you were and what you did); thus bearer asset money is extremely important; notice that a structural inflationary environment disincentivizes physical cash as well.
446ff Discussion once again about the $10,000 AML transaction threshold, which in 1970 was worth eight times what it is today; it was equivalent to the price of a median value house for example!; note of course that an intelligence agency can and will investigate any amount without probable cause; see also Germany which lowered the threshold on physical precious metals purchases from EUR10,000 to EUR2,000. Also France banned cash transactions over EUR1,000 under the justification that it was "to combat terrorist financing."
448ff On surveillance capitalism: offering free services but harvesting customer data, the author singles out Google as particularly gross in their surveillance capabilities; on data breaches that happened with corporations that gather information about us, ranging from Yahoo to eBay to the US Office of Personnel Management, to the website AdultFriendFinder, to Equifax, etc.
452ff See the revelations from Edward Snowden, where the NSA had surveillance capabilities far beyond what anyone knew, including being able to directly tap into major telecom providers and large corporate software platforms, all without a court order; also on the Pegasus spyware controversy, developed by an Israeli firm called NSO group, used on a wide range of people, including Thai activists and Catalonian separatists--Spain of course is supposedly a country with relatively high levels of freedom, allegedly!
457ff On China becoming the world's largest exporter of surveillance equipment and systems, thanks to its Belt and Road initiative globally; You can't help but see how obvious it is that China can and will create its own client/puppet regimes and give those regimes the technology to repress and surveil their own people; "surveillance as a service."
461ff "In the modern era, people should assume that virtually all information about them is collected into corporate databases, that their government can access the databases, and that the databases are vulnerable to external breaches by non-state or foreign-state hackers or inside leakers. It is most likely the case that you're sensitive personal data has been leaked multiple times on the dark web, and that your personal data is easily accessible to intelligence analysts as part of their surveillance apparatus."
Chapter 29: Asymmetric Defense
465ff Various defenses, including encryption, that individuals can use to protect from intrusions on their privacy; one of the key new decentralizing forces is encryption "because it is cheap to deploy but expensive to attack." "Encryption, therefore, is a method of making it expensive to violate someone's privacy in the digital age, like it used to be expensive to violate someone's privacy in the physical age."
467ff On the cypherpunk movement and The Cypherpunk's Manifesto essay by Eric Hughes in 1993; on the importance of private transactions and encrypted digital messages; anonymous transaction systems like physical cash; "If I say something, I it for only by those for whom I intend it." Also: "We cannot expect governments, corporations, or other large, faceless organizations to grant us privacy out of their beneficence." And, "encryption is fundamentally a private act."
470ff Discussion here of cryptographer Phil Zimmerman and his PGP (Pretty Good Privacy) program, and his legal problems with the United States government [a great, readable resource for this entire story is Stephen Levy's book Crypto].
472 Discussion of various attempts to limit the use of or the speed of traveling of automobiles in the early days of the auto's rollout, thanks to control mechanisms imposed by established industries like the horse and buggy; use of scare tactics and other requirements used to stop the new industry; on threats to policymakers and established financial interests who want it to be less easy to transfer value outside of nation state borders and a given country's banking system.
473 Note that "smartphone adoption has surpassed bank account adoption on a global basis" despite banks having centuries worth of a head start.
474 Note that there's a fairly limited amount of privacy techniques for using Bitcoin.
474 Comment here on the proposed Digital Asset Anti-Money Laundering act, put forward in 2022, it's basically stalled [Note: put forward by the clueless senator Elizabeth Warren and the potentially becoming clueful Roger Marshall, a republican from Kansas who actually withdrew his support for this bill in July of 2024]. Discussion here on how much privacy everyone has to give up in order to limit money laundering from a very small percent of the population; does it justify looking into every possible transaction, also what is the level of enforcement that a government even can do? The government couldn't shut down BitTorrent, and Bitcoin looks a lot more like BitTorrent then Napster; also if you look to countries like Argentina and Nigeria it's obvious that the government will try to protect its own failing currency at the expense of people's privacy using these types of laws. Discussion also of the so-called "unhosted wallet" providers: basically making open source wallet software illegal even though code is speech and thus a First Amendment right. Also, anybody can produce a private key by flipping a coin 256 times.
Chapter 30: A World of Openness or a World of Control
477ff The author was invited to Norway to meet with Ministers of Parliament in the wake of a proposal to ban Bitcoin mining in the country. The Human Rights Foundation held a freedom forum in Oslo also at the same time, this organization used Bitcoin and stablecoins; a discussion of the trucker protest in Canada, where people's bank accounts were frozen not just for protesting but for contributing to the protest movement, obviously this involved tremendous surveillance state behavior; this is also the time when Canada was limiting movement within the country with vaccine mandates; note that the state had no problem freezing bank accounts, freezing contributors' assets, also instructing donation portals like GoFundMe to shut down certain accounts... but it couldn't do anything about the transmission of Bitcoin holdings. "In other words, the usage of bitcoins added a considerable cost to enact Financial censorship."
481 Fascinating that there's a discussion here of the difference between "offering vaccines" and "mandating vaccines" especially when it was widely known [and to some people obvious from the very beginning] that they didn't impact transmission.
481 More discussion here on the idea of civil forfeitures, where in the United States you can have cash or jewelry or valuables taken from you without being charged with a crime; for example, if you're in a car with a lot of cash or traveling through an airport with valuables they can just be taken, and it is time-consuming and expensive to get their assets back, and the burden of proof is on the person to get their things back rather than on the authority that seized the asset in the first place.
482 On financial censorship against protesters or political opposition, and how it showed up disturbingly in Canada.
483 On how Bitcoin collects people from both sides of the political spectrum and it organizes them in emergent ways, also giving them a way to opt out of the existing financial system, and live in a parallel system instead.
486 On Eisenhower's military-industrial complex speech in 1961, the author quotes liberally from it.
487ff A long list of various supporters/evangelists of Bitcoin ranging from Alex Gladstein to Yan Pritzker talking about Bitcoin as a type of freedom advocacy.
490 The author makes the argument that the global financial system is malfunctioning, it tends to be reconstructed every several decades due to long-term debt cycles and misaligned policymaker incentives built up in the system; on signs that the system is breaking down once again.
491 Once again bringing up the question of "Who controls the ledger?", starting with local communities when commodity money was used; then moving on to seigniorage and abstracted gold-based systems; then to full fiat systems; then potentially going forward bottoms-up digital monies like Bitcoin that give the ledger back to the people. At the same time, top-down digital monies like CBDCs give governments and nation states that much more control. "When it comes to control of the ledger, there are two main parts. The first question is, 'Who can surveil and censor the transactions of others, or freeze their funds?' The second question is, 'Who can create money nearly for free and devalue the savings and wages of others?'" Brief review discussion here of the power of seigniorage; the power of technological superiority over another culture to dilute/mass produce their money; the structural problem of fiat currency systems where the central bank creates money for free while everyone else has to treat it as valuable; and then of course governments mismanage their ledgers and worse imprison people who try to flee from that ledger to protect their savings.
To Read:
***George Selgin: The Theory of Free Banking
Glyn Davies: A History of Money
William Stanley Jevons: Money and the Mechanism of Exchange
Saifedean Ammous: The Fiat Standard: The Debt Slavery Alternative to Human Civilization
John Maynard Keynes: Essays in Persuasion
Barry Eichengreen: Globalizing Capital
Barry Eichengreen: Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System
Paul Kennedy: The Rise and Fall of the Great Powers, 1500-2000
Stephanie Kelton: The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy
Yan Pritzker: Inventing Bitcoin: The Technology Behind the First Truly Scarce and Decentralized Money Explained
Lyn Alden: A Look at the Lightning Network
Finn Brunton: Digital Cash: The Unknown History of the Anarchists, Utopians, and Technologists Who Created Cryptocurrency
Philipp Bagus: In Defense of Deflation
Peter Bernholz: Monetary Regimes and Inflation: History, Economic and Political Relationships
Jeff Booth: The Price of Tomorrow
Hugh Rockoff: America's Economic Way of War: War and the U.S. Economy from the Spanish-American War to the Persian Gulf War
Emil Sandstedt: Money Dethroned: A Historical Journey
Scott Sumner: The Money Illusion: Market Monetarism, The Great Recession, and the Future of Monetary Policy
Shoshana Zuboff: The Age of Surveillance Capitalism