34 Comments

Great piece Dominic, thanks.

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thank you :)

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Let's go further and perhaps ask Bailey: "Why do we need the BoE to print money when the Treasury is capable of doing this?" After all the Treasury is just as independent or NOT as the BoE is.

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very true.

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Modern money is neither a fantasy or an illusion but certainly complicated enough to seem so. Modern money is promises to pay something in the future, a promise that will always be less valuable tomorrow than it is today in terms of what it will buy but not loosing value too quickly or no one would hold it or accept it all. It would be clearer if the notes were issued at a face value and then lost a certain percentage each time they changed hands. I suppose that's coming as a feature of CBDC's of some kind then the game can become still more complicated but perhaps more honest. Modern money is debt circulated for use in payment that should in theory disappear once used for payment but in practice circulates forever becoming less and less valuable over the course of time as more and more of it accumulates in the market.

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Dominic did you see the investigation in the times about drug dealers and gold in Dubai? Do you think this is large enough to impact the price like you said in your previous post?

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I haven’t looked at the story but Dubai has always been something of a centre for gold smuggling especially in the late 60s and 70s fwiw

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Interesting article. What price do you see BTC at the top of this cycle? Don't worry, won't hold you to it!

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"When you are ready, Neo, you won't be valuing BTC in dollars anymore..."

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Very true

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$150-200k

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Yeah, I think $145k minimum

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Regarding the article on "How to protect your wealth under Labour" have a look under the proposed wealth tax " box 3 " in the Netherlands. It is interesting concept on how the Dutch are going to approach this tax. The proposed 36% tax on your total wealth ( property, savings, shares, crypto) includes unrealised profits on your equity and crypto portfolio! So essentially, the Dutch fiscus at a particular point in time takes a mark-to-market position and levies 36% on your total value, despite not having realised any gains potentially. This clearly doesn't bode well for a healthy investment environment as people end up having to liquidate positions in order to pay the levied tax.

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I can't believe they'll be able to levy a 36% wealth tax but I shall take a look

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I'm going to take the unpopular side and disagree with a few points.

Neither gold nor Bitcoin function as money without another person. Nothing does. Money is a purely social technology.

Money is also not an illusion, nor a delusion. It's the foundation of civilization. And civilization is not based on a collective delusion, but on a shared reality. As corrupted and exploited as that reality has become, it began in a completely logical and sound manner.

Money is not wealth. Conflating money and wealth is the corruption of reality that leads to all the horrible exploitation of money we see today.

https://open.substack.com/pub/f0xr/p/money-is-not-wealth?r=3i492j&selection=a6a3c1e6-a466-4440-9052-3d77605abc0d&utm_campaign=post-share-selection&utm_medium=web

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Thanks for your comments. There is some conflation between store of value and medium of exchange here, even so I accept your point about social construct - enforced by law. Gold and bitcoin are nobody's liability and both occupy the status they enjoy without coercion, that makes them superior.

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Definitely agree with you on the superior forms of money.

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"So what makes money function? Why would someone accept a piece of paper with a picture of a dead president in exchange for a very real and very valuable good or service? Well, the obvious answer is that they can be certain they'll be able to exchange that piece of paper with someone else and get an equally valuable good or service in the future. This is circular logic though, and leads some economists to mistakenly attribute the value of money to a "collective delusion". But since every known advanced civilization has used some form of money, calling it a delusion is both inaccurate and boorishly pretentious."

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no need to be rude

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A quote from my article from a few months ago, not directed at you my friend, just thought of it reading through your article.

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You indicated that you would put in a link for the best financial newsletter, but I did not see. Could you give it to me?

Thanks

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Welcome to Africa, and we didn’t even need a boat this time!

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On “Life after the State” - all good. 1 and a half quibbles - why “administrate” and not “administer”, which seems to me a perfectly good English word? Or do you draw a distinction? And, I haven’t yet finished the book, but no mention thus far of a turnover tax (obviously to be levied at the same flat low rate as all other taxes). It seems to me this is the perfect solution to the likes of Amazon (billions of sales in the uk but very little tax paid), zombie companies turning over lots of cash but not actually being very productive or profitable, and the book cooking that any company does, using the 12,000 pages of tax law, to reduce their declared profits to near zero. Very hard to hide your actual sales, unlike your profits. And companies that make all or most of their sales overseas would pay little or no tax in the UK (their employees and shareholders would, of course).

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Administer is right. I was young and stupid.

Turnover tax complicated in practice. LVT much better

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Seems to me the attraction of both is the same. You can’t move land offshore, and you can’t pretend you didn’t send item X to a UK address. Perhaps I’m missing something.

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Turnover tax penalises low margin businesses

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You could as easily say turnover tax encourages high margin businesses (which I would have thought was a good thing)

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but eliminates no-margin businesses pretty quick

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Meanwhile Novavax is going gangbusters, Condor Gold not so much, but thank you.

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It’s time will come :)

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I’m still holding 😂

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Illuminating as ever Dominic. I remember you explaining to me how (fiat) money isn’t real a long time ago. And I’ve been scared ever since. Thanks for that.

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Any time. Fiat isn’t real but demons are

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