hypercoin

GM nostr!

Happy Labor Day weekend everybody. Great time to be alive and outside!

Learning about Omarchy today, any users out there?

So it seems like paid relays are a necessity with nostr? Spam issue on free relays?

“It is in times of security that the spirit should be preparing itself to deal with difficult times; while fortune is bestowing favors on it then is the time for it to be strengthened against her rebuffs.” -Seneca

I need to write more so I am building a tool to help me with that. Doing things your own way is peak.

GM nostr. Coffee going up right now and then I’m reading, the perfect morning.

nut 🥜

Distilling the meaning of this snippet from Lyn Alden's August newsletter: "Just because the Fed cuts interest rates, however, doesn’t mean long-end rates (such as mortgages, corporate bond yields, or small business loan rates) will decrease. They might or they might not. Even if they do go down, I don’t think we’ll get a lower-low in mortgage rates, which will mean we won’t get a major US residential refinancing cycle which we normally get in response to Fed cuts. In other words, without a lower-low in rates, the positive consumer impact from them is likely to be rather lackluster." Cutting rates may or may not result in lower long-end rates. The Fed Funds Rate is an effective overnight rate for interbank lending. Its affect is primarily felt in short-duration rates. It is not upstream of long-term debt such as 20Y Treasuries, 30Y Mortgages, 10Y business loans, etc. This is a common misconception and Lyn points out that alterations to Fed Funds (up or down) don't always result in the same directional movement of long term rates. Long term rates have more to do with inflation expectations. If you are going to hold debt for a long period, you want to be assured that you are not burning your money away as the cash value loses purchasing power. So, even if the Fed cuts overnight bank lending rates, there's no guarantee in a similar downward movement of long term debt interest rates. If long end rates do come down, that doesn't guarantee a boost to the consumer economy. A lower-low in rates would result in refinancing as, for example, mortgage-owners trade their existing debt for cheaper debt that is easier to service. This results in a cash balance that they can spend into the economy. Lower rates without a lower-low compared to their existing debt means they cannot obtain this cash balance. The rates may come down, but on a relative basis they are still more expensive than the existing debt held by the individual. This influences existing loans to remain in place, mitigating the potential for new cash balances to benefit individual's economic positions.

GM nostr.

Warning, the following is very long. At the behest of an X user espousing communist ideology I read the Foreword to Heinrich Schurtz's "An Outline of the Origins of Money" given by Michael Hudson. It's frankly unconvincing and I find it full of ideology. There is no context given for foundational origins of money, only sociological arguments for how communities should react to established economic order. I instead recommend Nick Szabo’s 2002 Shelling Out paper. Here is a Claude summary of counterarguments to both Hudson/Veblen as well as Szabo, I've included portions in parenthesis where I've inserted my own writing: Michael Hudson and Thorstein Veblen both challenged mainstream economic narratives about money's origins, but their theories face several significant counterarguments: Against Hudson's Debt-Based Origins Theory Archaeological Evidence Limitations: While Hudson points to Mesopotamian temple and palace records showing debt accounting, critics argue this evidence primarily reflects elite institutional transactions rather than the broader economy. Most daily economic activity among ordinary people likely went unrecorded, making it difficult to conclude that debt preceded barter universally. Anthropological Counterexamples: Ethnographic studies have documented numerous societies where barter, gift exchange, and commodity money emerged independently of centralized debt systems. Some Pacific Island societies, for instance, developed shell money systems without prior debt institutions. (Szabo gives examples which speak to this, a specific example being the Kula ring, wherein both 'inside and outside' money circulated. This did not emerge from institutional creditors or credit/debt as a concept, it was entirely commodity-based.) Causation vs. Correlation: Hudson's evidence shows debt accounting and money coexisted in early civilizations, but this doesn't necessarily prove debt caused money's emergence. Both could have developed simultaneously or money could have enabled more sophisticated debt arrangements. (Again, proven by Szabo. Unforgeably costly commodities or pronto-money collectibles were historically used as closed cycle economic settlement of 'debts' such as in marriage arrangements or payment of tribute. This is an origination of money which is not based on denominated debts.) Against Veblen's Institutional Credit Theory Spontaneous Order Evidence: Veblen emphasized institutional creation of money, but critics point to numerous historical examples of money emerging spontaneously - from cigarettes in POW camps to Bitcoin in digital networks - without centralized institutional design. Overemphasis on Social Control: While Veblen correctly identified money's role in social hierarchies, critics argue he overstated institutional manipulation versus genuine economic efficiency. Money's adoption often spread because it genuinely reduced transaction costs, not merely because institutions imposed it. (Szabo points this out as well, the amortization of transaction costs of a collectible if it circulates in closed economic loops.) Limited Scope: Veblen's focus on credit relationships in developed economies may not explain money's origins in simpler societies where direct commodity exchange was more prevalent. Broader Methodological Criticisms Both theorists face the challenge that multiple origins are possible - money likely emerged through different pathways in different societies rather than following a single universal pattern. Their theories may capture important cases while missing others. The survivorship bias problem also applies: we have more records from societies with writing systems and institutions, potentially skewing our understanding toward their more organized monetary systems rather than simpler societies where different patterns may have prevailed. These counterarguments don't necessarily invalidate Hudson's and Veblen's insights about money's social and institutional dimensions, but they suggest a more pluralistic understanding of monetary origins may be warranted. Nick Szabo's "Shelling Out" theory proposes that money originated from collectible objects that served as proto-money for wealth storage and transfer across generations, predating both barter and debt systems. Here are key counterarguments to his theory: Archaeological and Anthropological Challenges Limited Evidence for Universal Collectibles: While Szabo points to shells, beads, and other durable objects found in archaeological sites, critics argue this evidence is often ambiguous. Many "collectible" artifacts could have served ritual, decorative, or status functions rather than monetary ones. The leap from "valuable object" to "medium of exchange" isn't always well-supported. (Szabo addresses this criticism directly in the paper. It's also an indirect criticism, using semantics [“medium of exchange"] to define money rather than empirical observation of any given object's ability to circulate in an economy to settle transactions.) Geographic and Cultural Specificity: Szabo's examples (Pacific shells, African beads, etc.) may reflect specific cultural contexts rather than universal patterns. Many societies developed monetary systems without going through a collectibles phase, suggesting his theory may be regionally limited rather than explaining money's origins broadly. (This doesn't account for modern origins of collectible proto-money originations, examples of which were given earlier [cigarettes in prisons].) Preservation Bias: Durable collectibles like shells and metals survive in archaeological records while perishable goods that may have served monetary functions, like cattle, grain, textiles, often don't. This could skew our understanding toward Szabo's preferred examples. Economic Function Problems Storage vs. Exchange Confusion: Critics argue Szabo conflates wealth storage with monetary exchange. Objects that store value across time don't necessarily function well as media of exchange for daily transactions. The qualities that make something a good store of value (durability, scarcity) may actually hinder its use as money (divisibility, portability for small transactions). (Already addressed [amortization of transaction costs via continued circulation].) Scale Mismatch: The collectibles Szabo describes often had high unit values, making them unsuitable for small-scale daily transactions that comprise most economic activity. This suggests they may have been prestige goods rather than general-purpose money. (Not sure why this was included in the critique, shell money [literally the title of the paper] is a good counterexample.) Logical and Theoretical Issues Circular Reasoning: Szabo's argument that certain objects became valuable because they were scarce and durable, and therefore became money because they were valuable, contains some circularity. It doesn't fully explain why these particular objects rather than others acquired monetary properties. (Also not sure why this is an included critique, the AI has answered its own concern by pointing out scarcity and durability [unforgeable costliness] as the objective criteria which yield value for the objects in question.) Ignoring Social Context: Unlike Hudson and Veblen, Szabo's theory is relatively asocial - it focuses on object properties rather than the social relationships and institutions that give objects meaning. Critics argue this misses how monetary value emerges from social agreement rather than inherent physical properties. Technology Determinism: Szabo's emphasis on the physical properties of collectibles (unforgeable scarcity, durability) reflects a somewhat technologically deterministic view that may not account for how social and cultural factors shaped monetary evolution. Alternative Explanations Coexistence Rather than Precedence: Rather than collectibles evolving into money, these objects may have served parallel functions - collectibles for wealth display and storage, while other systems (barter, debt, or simple commodity exchange) handled daily transactions. Status Goods vs. Money: Many of Szabo's examples may be better understood as status symbols or ritual objects rather than proto-money. Their value came from social signaling rather than transactional utility. Modern Bias: Szabo's theory may project modern concerns about store-of-value and scarcity (influenced by his involvement in cryptocurrency development) onto ancient societies that may have prioritized different monetary functions. (Paper was written in 2002. Clearly not influenced by "cryptocurrency" which was at that time a non-validated idea. Szabo had worked on BitGold which lends more credence to the idea of being influenced by a belief in the economic soundness of monetary metals.) Szabo's insights about unforgeable scarcity and the importance of durable value storage remain valuable, but his theory may explain only one pathway among several through which monetary systems emerged, rather than providing a universal account of money's origins. End of Claude portion. The rest is me. Overall I find Szabo's arguments regarding foundational objective characteristics of money as leading to its origination much more compelling than Hudson/Veblen's which have reliance on sociology. Hudson/Veblen's claims are steeped in ideology regarding social suggestions for rejection of wealth concentration which don't speak to any objective attempt at identifying money's origins. If you read this and found it informative, feel free to share!

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Praise the sun.

GM nostr.