Bitcoin is the Phoenix

Martin Armstrong and Rothschild controlled Economist Magazine both predicted (in 1985 and 1988 respectively) the arrival of the Phoenix by 2018. Legacy Bitcoin is the Phoenix and it will catapult to greater than gold’s market capitalization with the imminent SegWit donations funding the acceleration in mining difficulty (and thus also price) starting probably May 14, 2020.

The blog Get Ready for the Phoenix – The Reality of a One World Currency contained:

QUESTION: Mr. Armstrong; Are you aware of the 1988 Economist article predicting that in 30 years from then we would all be using the same currency? That is strangely your target of 2018 when you have warned that the Monetary Crisis will begin then. I met an attendee from your 1985 WEC there in Hong Kong. He said you gave that date of 2018 way back at that conference. Did the Economist take your work for that article?

ANSWER: The Economist did not really make a forecast. They were just generalizing what might happen in 30 years from then. I do recall speaking to them back then, but I disagreed with the concept that everyone would be shopping with the same currency around the world. I was one of the people called in back in 1985 when they were creating the G5 (now G20) at the Plaza Accord. I had originally proposed back then that we adopt the SDR at the IMF as the new reserve currency.

I blogged 2 years ago:

P.S. I stumbled onto an essay I wrote in 2008 contemplating something like Bitgold or Bitcoin and published 14 days before Szabo did. I had not worked out how to eliminate the physical backing entirely, but I was spot on the concepts of cryptography and decentralization.

Phoenix Rises as a Hegelian Dialectic

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However, the monetization of medium-of-exchange can now become orthogonal to medium-of-saving (which is evidenced on the international savings scope, with the existence of national currency standards orthogonal to the dollar international reserve currency and that international investment flows now dwarf trade flows, which surprisingly Armstrong failed to assimilate), because the frictional costs of trading electronic assets do not have an insignificant cost epsilon when requiring more frequent transactions than saving:

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To not be a slave to fiat (or an altcoin slave to BTC), I posit that a cryptocurrency has to have use-cases that make these “frictional effects” significant so that the cryptocurrency can’t be disintermediated as follows:

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Yet Moldbug loses focus that only the sovereignty of the fiat provides the Nash equilibrium strategy Schelling point. NIRP in the EU demonstrates that the sovereign can charge a negative discount rate as an admission fee:

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Thus as explained mathematically below, any one outcome can’t be the sole preferred strategy, even if the force of fiat is creating an ephemeral strategy choice for the international reserve currency and national currencies medium-of-exchange standards. And I already explained why being tethered to a universal, singular, eternal monetary standard would require a static (past undifferentiated from future) Universe which thus by definition, can’t exist.

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Thus afaics, the only two potential Schelling point opportunities for a Phoenix global currency to rise would exist simultaneously with and be separate from from any national (or regional bloc) currencies:

• World institutional fiat international reserve.
• Globalized medium-of-exchange with some exclusive, compelling attribute— i.e. intrinsic value:

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In the first case, I’ve already explained that precious assets (e.g. metals) can’t have a Schelling point for becoming an international reserve […]

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Truly “decentralized” cryptocurrencies […] that are thus not ultimately fiats […] can never become the international reserve currency for fiats because dubious liquidity between cryptocurrencies and fiats will be potentially attackable at least until if cryptocurrency becomes too popular globally (which is the Hegelian catalyst discussed below). The paramount generative essence attribute of a reserve currency is liquidity^*.

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If cryptocurrency establishes widely sought use-cases that can’t be provided by fiat medium-of-exchange (e.g. permissionless, regulation-free, non-modal, borderless, instant, nanotransactions in a paradigm where blockchains displace all widely shared centralized databases on the Internet), national and regional fiat regimes would find it difficult to prevent these uses because it would be Whac-A-Mole with similar outcomes as the example of as the more decentralized file sharing is attacked, the more popular it becomes. The fiat regimes could attack or threaten to attack centralized exchanges and other choke points within their jurisdictions, but unless most jurisdictions are coordinated then cryptocurrency systems will route around the defecting nations causing them to suffer more than the whole. Users may game the global system using different fiats/jurisdictions as proxies routing around defecting jurisdictions.

Presuming the Scalepocalypse is solved (which it will be, as solutions are known already with for example Steem already scaling but not truly decentralized), cryptocurrency is poised to be the Hegelian dialectic catalyst that drives coordinated acquiescence to a world government, because a worldwide coordination will be required to regulate liquidity between fiat and cryptocurrency in order to rescue central banking from extinction and sustain the Iron Law of Political Economics “long con”³ that society demands. This thesis even seems to correlate with the scripture that the Beast is wounded but recovers because the people demand it.

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The Economist inadvertently predicted the potential rise of a non-fiat, globalized cryptocurrency:

THIRTY years from now […] Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix. The phoenix will be favoured…because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century […]

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The impending strong dollar vortex stampede short squeeze […] which will be viewed by many policy makers as one of the causes of the imminent global economic collapse, may provide the will to coordinate on an international reserve currency which can’t be controlled by any one nation […]

In 1988, the Rothschild controlled Economist Magazine wrote in Get read for a world currency:

The new world economy

The biggest change in the world economy since the early 1970's is that flows of money have replaced trade in goods as the force that drives exchange rates. As a result of the relentless integration of the world’s financial markets, differences in national economic policies can disturb interest rates (or expectations of future interest rates) only slightly, yet still call forth huge transfers of financial assets from one country to another. These transfers swamp the flow of trade revenues in their effect on the demand and supply for different currencies, and hence in their effect on exchange rates. As telecommunications technology continues to advance, these transactions will be cheaper and faster still. With uncoordinated economic policies, currencies can get only more volatile.

Alongside that trend is another - of ever-expanding opportunities for international trade. This too is the gift of advancing technology. Falling transport costs will make it easier for countries thousands of miles apart to compete in each others' markets. The law of one price (that a good should cost the same everywhere, once prices are converted into a single currency) will increasingly assert itself. Politicians permitting, national economies will follow their financial markets — becoming ever more open to the outside world. This will apply to labour as much as to goods, partly thorough migration but also through technology's ability to separate the worker form the point at which he delivers his labour. Indian computer operators will be processing New Yorkers’ paychecks.

In all these ways national economic boundaries are slowly dissolving. As the trend continues, the appeal of a currency union across at least the main industrial countries will seem irresistible to everybody […]

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The phoenix zone would impose tight constraints on national governments. There would be no such thing, for instance, as a national monetary policy

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As the next century approaches, the natural forces that are pushing the world towards economic integration will offer governments a broad choice. They can go with the flow, or they can build barricades.

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That would let people vote with their wallets for the eventual move to full currency union […] In time, though, its value against national currencies would cease to mater, because people would choose it [the currency union aka Bitcoin] for its convenience and the stability of its purchasing power.

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The alternative - to preserve policy making autonomy- would involve a new proliferation of truly draconian controls on trade and capital flows. This course offers governments a splendid time. They could manage exchange-rate movements, deploy monetary and fiscal policy without inhibition, and tackle the resulting bursts of inflation with prices and incomes polices. It is a growth-crippling prospect. Pencil in the phoenix for around 2018, and welcome it when it comes.