Trade With Dave

One of Dave’s hardwoods does its best Jerry Maguire “strong as oak” impression while breaching the perimeter

Wanda: (sign) The Grateful Dead are alive and living in Beverly Hills

Maxwell Smart: (countersign)  Simon and Garfunkel fell off the Tallahatchie Bridge.

Get Smart 1968 (The Groovy Guru)

“What you got big guy?”  I had probably heard that same inquiry three or four times before I realized that there was a pattern… a code… a sort of spy language for citizens of the county attempting to access the local landfill.  Fail to answer the question with the countersign confidently with the password “household trash” and find yourself relegated, rebuffed and otherwise sent to multiple stations around the county’s landfill facility.

Is a broken dehumidifier, technically speaking, household trash or is it “white goods” even if the case is plastic and not metal?  How about an empty paint can?  Is it still a paint can or more specifically “paint” if there’s nothing left in the can but the label clearly says “Behr” primer?  Does the can even really belong to me or did I just buy the paint at Home Depot and the can really belongs to Home Depot’s shareholders.  I didn’t go to Home Depot and say I would like to buy a can.  I went to buy paint… they gave me the can and now I don’t really want it.  As a matter of fact, did I even buy this particular paint or was it at my house when I moved in?  This is getting as complicated as an asbestos settlement.  Let’s start at the beginning.

It all started with a text message to my son.  “Storm coming… stay where you are.”  My son had just finished college had driven out to the store and Dave noticed a really dark storm rapidly approaching Daveland.  Although I felt a little awkward texting a twenty-two year old “stay where you are” which assumes he doesn’t’ know what a bad storm looks like, little did I know just how bad of a storm it was.  Ten minutes later, my wife and another son were gathered in the middle of our house in the hallway and thirty seconds after that we were running to the basement.

The sound of wind is a variable sound.  It goes up and down in speed, but the sound we heard was most definitely louder than normal wind and it wasn’t variable in nature.  It was more like the sound of a lawn mower running… a really big lawn mower.  In a minute or two the whole thing was over and less than a week later I found myself reaching into the back of a U Haul trailer and heaving a broken dehumidifier into a 48 foot semi trailer trash container when I overheard the now famous meme; “What you got big guy?”  Thankfully, I had already backed the trailer into “position 4″ and was eagerly unloading my environmental gift to future generations because I knew the answer to the proverbial landfill gatekeeper question was “household trash” before I ever realized what the question was exactly.  When the pot bellied man sitting in the folding chair under the umbrella and assisted by the attractive young lady had asked Dave “What you got big guy?”, I had answered correctly and now I was eagerly unloading my terminal wares within earshot of the checkpoint and heard that same question asked more than a dozen times during Dave’s download for posterity.

It doesn’t take a genius to figure out how the sound of the world’s largest power mower hovering over Daveland for two minutes can result in Dave being faced with some serious cleanup and while in the process why not make a trip to the local landfill.  It is spring cleaning season.  The fact that the tree pictured above ended up in Dave’s neighbors yard (see below) courtesy of the local power company is another story.

Davelane temporarily blocked by another falling tree limb.

You can now see the forest for the trees due to the new path cut by mother nature.

Knowing your way around the landfill is like knowing your way around the market.  Do you remember that story about that group of investors who would have lunch at this podunk diner nearly every day.  Their investment strategery was to make investments in growth companies and then to bail out once people at the local diner either had heard about the company they were investing in and were talking about it or a waitress at the diner had bought stock in one of their target companies.  In other words, once it became mainstream, they would dump the stock knowing that the market penetration and growth of the company’s business was so complete that it had engulfed their small town diner.

So here’s Dave pulling into the local county landfill and they have one of those big reader board signs out front near the entrance.  You know those signs where you can change the letters like you see outside high schools announcing a teacher’s work day or in front of a mobile home sales lot announcing that they have land/home/package deals.  What did it say on the landfill sign?  What else could it say but “Like Us On Facebook”?  Dave has never liked anything on Facebook, but I really liked that sign because it was a sign to Dave that the waitress or the taxi driver or your friendly barber has probably already done his Facebook investing and that all that’s left for any of us to do with Facebook is to “Like” the landfill.

It was at that moment that I recalled yet another social network that was red hot and this was before the invention of Al Gore’s internet.  It seems that a fellow I knew had sold his very successful Detroit based cold forging metal business to Masco the burgeoning conglomerate and subsequent to his becoming a Masco executive the company purchased Royce CB.  You have pretty to be pretty old to remember the Citizen’s Band radio craze… good buddy.  There were movies (Burt Reynolds in Smokey & The Bandit) about long haul trucking and even a TV show and they pretty much revolved around talking on CB’s like the local landfill is revolving around being talked about on Facebook.  I can imagine the Facebook postings…  “What did you dump today?”  “Oh, I dumped a busted lawn mower and some old bleach that I found in my shed.”  “I’m going to like you for that on Facebook… will you like me back good buddy?”  “Ten-four… I’m liking you back.”

If it wasn’t difficult enough for Facebook already to have its name on display at the landfill (just imagine that guy who is buying clothes for homeless people with Abercrombie and Fitch’s exclusionary logo), Facebook’s numbers are suffering and media mogul Rupert Murdoch “likes” it.  Murdock went so far as to celebrate the first birthday of Facebook’s IPO on Twitter.

. Rupert Murdoch ‏@rupertmurdoch 16 May

Look out Facebook! Hours spent participating per member dropping seriously. First really bad sign as seen by crappy MySpace years ago.

The fact that Murdoch is liking the drop in hours spent participating on Facebook may be related to his $545 million loss when he sold MySpace in 2011 just six years after buying the company.  I can’t imagine why Facebook’s popularity would be dropping when you consider that the company clearly provides the opportunity to spend time at the local landfill without having to experience all five of your natural senses.

If the local landfill isn’t getting all the Facebook “likes” they deserve maybe they should hire this guy as a marketing consultant:

Clearly virtual trips to the landfill, at least for Dave, are preferable with the exception of actually being able to dispose of that broken beach chair that you just knew was strong enough to stand on while you loaded a surfboard on top of the car but unfortunately it folded by a third just like Facebook’s stock price over the past year.  Is Facebooking going to way of scrapbooking and those casserole making suburban retail concept franchise stores that popped up during the housing boom only to be dumped or is CEO Zuckerberg simply taking a breaker-breaker “10-100″ pause that refreshes.  Hopefully for Facebook shareholders they aren’t headed down the same road Royce CB’s (the road to the landfill) once car phones entered the picture in the 1980′s?  But I digress, so I’ll catch you on the flipside.

If Dave is generally a macro guy, then why all the trash talking human interest in clearing Dave’s driveway while giving thanks for hydraulics and Warren Buffet’s Constellation Energy sponsored free tree removal services.  Actually there is a bigger story here and it’s about alternative currencies, bitcoin and solid waste pollution – the kind that goes to landfills.  About fifteen miles from Daveland is a big military base and one of the things that powers that military base is the solid waste from Dave’s little burg of 20,000 residents.  That’s right.  The municipal waste is picked up in the town from trash cans and it’s hauled to an incinerator near the military base where it is burned which generates steam which generates power which generates the military half of the military/industrial complex.

Well it seems that some laws have changed.  It was probably the Clean Air Act or the Clean Water Act or the Biometric Tracking of Identical Winkelvii Twins Act that has resulted in some hotly debated issues surrounding solid waste in the particular community where the incinerator is, or was, located.  It’s been front page news on the local (10,000 circulation) twice weekly newspaper for the past year or so.  They’ve discussed relocating the transfer station, the implications of shutting down the incinerator, etc., etc.  Dave doesn’t actually even know the details, but that didn’t stop Dave from sending a few emails to the Chairman of the County Commissioners.

You see Dave knows that you don’t have to be Wayne Huizenga (Waste Management, Blockbuster, AutoNation) to know that there’s money in trash.  The only thing that trash has more in common with being a money maker is a public policy concept known as NIMBY, or Not In My Back Yard.  When it comes to turning one man’s trash into a Huizenga treasure, transforming concepts from NIMBY to NIMBP (Now In MY Back Pocket), communities could stand to learn a thing or two from Wayne.

Here’s a copy of the original email that I sent to the chairman of the county commissioners way back on December 18, 2011.

The nice thing about the chair is that he is kind enough to write me back as we exchanged a few emails on the topic.  The tough thing is that he thinks that I have to sell him on the idea when the reality is that the trash is going to keep piling up until both the community, the government and its leadership come to the realization that the answer is staring them in the face and that smell rising from the freshly churned land/trash mixture is not going to be getting all the Facebook “likes” that the county’s reader board advertisement had been hoping for.

So Dave’s been thinkin’, as he’s inclined to do, about how I might go about presenting the concept that one county’s trash is the same county’s treasure.  The chairman wrote back via email, and I quote,

“The problem is David I don’t get to make those decisions as a councilman. I’m still waiting for something from the Executive which is starting to make me nervous because time is running out on being prepared when the current contract expires. I’d be glad to try and sell your idea to the administration if it makes sense.” 

Well, it’s not really my idea and it doesn’t only make cents, it makes dollars too, or more specifically Bitcoins now that they’re going mainstream and all and anyone who wants to be “somebody” is going to want some Bitcoins and what better way to get them than to trade a trailer load of household trash for an electronic wallet full of virtual cash.  So, here goes…

Trash isn’t a new idea and our county is up-to-date because we even have single stream recycling where you don’t have to sort out your trash, but we also are old school in that through a partnership with the Feds we’ve been burning trash in an incinerator for years and that’s go to stop.  So right off the bat, Dave’s going to tell you that he’s no trash expert.  I’m not even an expert “community organizer”, but I can tell you this.  I’ve done these type of deals before with the state, with the local town and with the Feds and I know when the time is right and when something will work.  The window of opportunity to connect solid waste policy with the monetary system is upon us and the obvious green light that has been given to Silicon Valley investors to bolt the Federal Reserve System onto Bitcoin will create the tsunami of energy (read money) that communities are going to need to “take back their trash.”

The Bad News Is Accounting For Trash Probably Won’t Get You Re-elected

(but your kids and your great-great-grandkids will think you’re super cool)

I’ll start with the bad news which is the thing the politicians refuse to touch with a ten foot pole due to the non-virtual smell that AFT (Accounting For Trash) will cause to show up on their clothes come November election season.  If you are on municipal water, your usage is measured by a water meter.  If you have natural gas, your usage is measured by a gas meter.  If you generate externalities such as trash it’s going to be measured just like everything else.  Dave doesn’t care if you measure it by the pound, by the cubic foot or by the trash can load.  I can tell you one thing for sure if you can’t account for it, you can’t improve it.

Dave’s not going to tell you how to best go about measuring trash.  Dave’s sure there’s some community in California or maybe Sweden that is borderline communist that has already figured out the best solution for trash counting.  If you feel like Dave’s invading your privacy because he wants to measure your trash, believe me I don’t want to measure your trash.  I don’t even want to measure my own trash (and I didn’t have to this week), but your trash is becoming my trash the minute your trash gets put out on “our sidewalk” for pick-up.  So if you don’t want your trash accounted for, then don’t put it out.  Take it back to where you got it from.  Take your paint cans back to Home Depot and your busted big screen TV’s back to Best Buy and take all the boxes and packaging back to where they came from while you’re at it.

Dave already does this sometimes when he buys stuff and not because I’m a tree hugger (see chainsaw evidence above) but because it’s easy and I can be lazy.  I’ll take what I buy out of the box while I’m at the store and then kindly go up to the customer service desk and say “Here’s your box back.  Thanks for the new window air conditioner” or “Thanks for the new set of cookware” or “Thanks for the Blu Ray DVD player… you can keep the box.”  Dave’s all about your privacy, but your trash, the trash that you want to send to Dave’s landfill, well that’s not your trash anymore and somebody is fixing to get up in your trashy business… capiche?

So you think accounting for your trash is a bit extreme?  Fine, then don’t come up with some voluntary solution and instead wait for the government to have their own IRS/Tea Party/Obamacare version of trash pickup.  I mean really how hard is it going to be to put a bar code on your trash can, scan it and then let the hydraulic lift arm on the trash truck weigh each can and store the data?  Heck, with some Cass Sunstein behavioral database they will be able to calculate how many illegal aliens you have living in your rental properties based on the trash output post-data analysis.  You think that will never happen?  You’re probably the same guy waiting in line to pay cash at the EasyPass toll booth on the way to the beach on Memorial Day weekend because you don’t want them to track your car.  I got news for you, they track it with the license plate already.

They scan my license plate (technically speaking it’s their license plate) without probable cause, but they would never scan my trash. Right. /sarc off.

So if you believe you have some constitutional right to your own trash, then I suggest you buy enough land to build your own landfill and make sure you check with your Governor and most likely Homeland Security if you’re going to throw away any pressure cookers or paint cans into that landfill.  If you disagree with Dave that before you can make cash on something you need to account for it, then you can stop reading now and instead of getting ahead of the tsunami of solid waste, you can wait until the Audi Green Police show up at your home in Boston without a warrant and are doing house-to-house tall kitchen garbage can and boat searches (I forgot… they didn’t search the boat) and handing out citations for composting violations because somewhere in the neighborhood there’s a pre-criminal on the loose so it’s justification for shredding the constitution.

Like any good lawyer (yes, there are good lawyers, just like there is good trash) you don’t necessarily need to know the answer as long as you know where to find the answer.  Here’s a paper written by Bernard Lietaer who is a currency specialist and was involved in the development of the Euro.  I’m not going to hold the Euro project against Bernard because I’m not suggesting a direct application of his “civic credits” model.  Instead I’m suggesting that the local government catch the Bitcoin popularity wave and use it to ride from Bernard’s concept of local currency in the form of “civic credits” to a global currency in the form of Bitcoin which greatly increases the odds of success through the creation of powerful feedback loops in the form of Lorenz attractors that are needed to create a new system that will flourish.

Government Issued CCs 1102 by user909

Does this mean that the county would be required to develop, manage and otherwise enable “civic credits” to be used to pay property taxes?  No.  They could simply accept Bitcoins through one of the many emerging payment systems which will be coming to a retailer near you.  My guess is your county already accepts credit card payments for property taxes.  If they don’t they should and if they want to tag on the merchant fee, then tag it on.

So what’s the real connection between Bitcoin and solid waste?  To be completely truthful there isn’t one… with one key exception.  There’s a gambling component with Bitcoin (cough… we’ll call it speculation) that you wouldn’t get with simple civic credits or local currency such as Berkshares (http://en.wikipedia.org/wiki/Berkshares) due to Bitcoin’s burgeoning nature and ubiquitous acceptance.  Normally, a local currency is launched by funding the initial distribution of the local currency through a cash infusion from a community foundation or a large local employer/sponsor or a group of activist merchants.

The challenge to local currency models is that the velocity of the alternative currency is destined to cool off due to the second law of thermodynamics (behavioral economics version 2.0) when the currency chits are either lost in a washing machine, a junk drawer in the kitchen or head out of town and breach the barrier of acceptance never to be heard from again or the merchant acceptance network dwindles over time simply due to business attrition rates of the enthusiast retailer acceptance network.  Dollars, being the world’s reserve currency (at least until this past week – google Mt. Gox & Homeland Security) haven’t suffered the same leakage that say Disney Dollars have or Amazon Coins will.

Bitcoin solves all those problems while adding back the clear attractiveness of speculating (i.e. gambling) on future price appreciation with odds that are about 99% better than your state’s “education” lottery (aka the Chump Tax).  What does the county government need to do then?  The county becomes either the over-the-counter distributor of the currency or better yet licenses local merchants to handle Bitcoin transactions OTC as both a form of payment and as an non-virtual exchange.  Most states are already in the money services licensing business, but regulating local OTC (that’s over the counter) bitcoin distribution is best suited to a local agency such as county government.

As far as what network would the county endorse?  There will be more choices in the near-term than any bureaucrat would want to choose from be they Bitpay, Coinbase, ZipZap,  or Bitcoin alternatives such as LiteCoin or PPCoin or brand agnostic exchanges such as Ripple.  Ultimately it will probably settle into the duopolistic Fedex/UPS, Verizon/AT&T models that pass muster with the fantasy of free market capitalism while reaching the investment criteria of Silicon Valley venture capitalists, but in the near-term it will be exciting to consider all the alternatives… that is until they’re driven out of business or as in the case of Tumblr are sold for $1.1 billion to a consolidator.

The good news is that you are going to be able to turn your trash into treasure (bullish for community prosperity).  The bad news is that you’re going to be required to account for your trash (could be bearish for Best Buy, Sam’s Club and the manufacturer of electronic poker machines).  What method exactly of converting trash to Bitcoins, or maybe having to purchase a certain amount of Bitcoins (in the form of a tax) and having to use those Bitcoins to pay for your trash removal is going to be implemented in Dave’s community?  It doesn’t really matter.  I can think of a handful of ways to handle the process, but without exception it gets into the pockets of the trash haulers in the community (sorry Wayne) and the pot bellied man sitting under the umbrella with the attractive girl in the optic yellow safety vest (sorry BIG GUY, but ideas are the main thing that Dave’s “got” to trade while keeping your pension liquid is your problem).

This is also going to get into the pockets of local casino operators and Cherokee Indians like Senator Elizabeth Warren.  You see there’s a lot of money made on Mega Millions lottery ticket sales, ticket printing and distribution systems at convenience stores and the like.  Dave calls it The Chump Tax because you feel like a chump while you wait in line to buy a bottle of water and a sleeve of cashews behind the real chump who is buying the lottery tickets at the corner mini-mart.  Both Governors and your local Sheldon Adelson gambling industrial complex managers aren’t going to like that either because you’re getting up in their “education” lottery business.

The last time I was at my county landfill it didn’t stay “State” landfill, the sign said “County.”  Sorry Guvna… unless you want to come pick up all this trash, this is a local issue and for the most part so is “education” and all those lottery billboards that educate people that their only “hope” for “change” is to win the long shot, if you ask Dave, fail to meet the criteria of a “social good”.  For you savvy entrepreneurs and aspiring politicians out there, there are plenty of reasons why you need to seek out the lobbyist who understands that Bitcoin’s regulatory framework recursion is best suited for county rather than the state level… that is if Bitcoin is used to solve your local solid waste problems.  If you want to turn trash into treasure, and a lucrative political career, then you need to get on the global virtual currency trash train before it leaves the transfer station.

Dave’s no accountant although I took accounting at Wharton.  Dave’s no engineer, although I have met a few garbage men that have “sanitary engineer” on their resumes.  I’ll leave it up to long-winded first and third Tuesday of the month late night boring county council meetings that you can watch for yourself on local access cable to debate what particular methodology of carrot vs. sticks that the local government can impose upon its citizenry to pick up the tab for picking up the trash.

To quickly summarize years of debate either you can be given a certain number of Bitcoins by your county to apply to your trash pick-up or you will be required to purchase a number of Bitcoins (more likely) and redeem them in association with trash pick-up or you will be able to earn Bitcoins by having your trash externality means-tested (think Simpson-Bowles) and then you will either pay in Bitcoins or redeem in Bitcoins based on your variance over or under your trash allowance.  If that “solution” is feeling a bit too Hegelian for you, then I suggest you bone up on the implications of “triple entry accounting” which is the entire basis of Bitcoin before you head down this road.  You can simply type the words “triple entry accounting” or “3D accounting” into the search box here at www.tradewithdave.com and you’ll get a dumpster full of articles on the subject.  If you want to go deep, search for Yuji Ijiri and if you want to go even deeper search for Jaromil.

For all you folks out there who enjoy heading over to the local electronic slot machine casino to gamble away your pensions, there’s a new game in town.  Betting Bitcoins on your trash.  For all of you property owners out there who are sick and tired of being sick and tired of rising property taxes, I have good news for you.  You’re going to be able to pay those property taxes with Bitcoins and they may just rise in value (or fall like gold and silver have been doing).  For the manager of Best Buy and Wal-Mart, I have some really, really bad news for you.  Uh… customers are going to be leaving their boxes at your stores.  Hey, you brought all those boxes and paint cans into the community, so you can take them out or pay (in Bitcoins if you so choose) to dispose of all that solid waste (completely accounted for) into the local landfill.

Is your county going to measure their trash by the pound, by the cubic foot or by the dumpster load?  I don’t know and to be honest with you I don’t really care.  All Dave had to do was to load up that U Haul trailer with junk and then heave it into a dumpster that was conveniently parked below the grade of my trailer.  No weighing… no counting and the fee was a mere $7.  When it comes to dealing with that incinerator contract and complying with everyone from the Department of Pressure Cooker Terrorism Disposal to the Governor of your state (mine’s a member of the White House Council of Governor’s… how ’bout yours?) your constitutional right to dump trash on the sidewalk is soon going to be revoked along with the IRS status of your Tea Party non-profit application.  You may as well get in front of it and make a few coins in the process.

It’s tough to say if Dave’s virtual dive into the dumpster of solid waste and its connection to currencies will stir up a perfect storm of business-indvidual-government or a conflagration that burns up the solid waste disposal infrastructure (read cronyism) beyond recognition.  Dave can’t promise that, but Dave knows that there is a promise about storms.  You see after that storm that knocked down all those trees on Daveland had passed, Dave was in the parking lot of one of those big box retailers that brings loads and loads of solid waste and packaging into Dave’s community and leaves the trash here for us to deal with.  Dave was at Target when he saw this rainbow.

It was stunning.  Then I started watching people as they came out of the store and their universal reaction of being overwhelmed by the beauty and extraordinary design stretched across the sky.  Kids would say “Look mommy!” and Moms would say “Oh my… what a rainbow!” as Dads would pull out their phones to take a photograph and nearly everyone was stopped dead in their tracks by the amazing display of beauty following the devastating display of power.  I know the answer to the question; “Will there ever be another storm like the one that lasted forty days and forty nights?”  The answer is no.  But there’s still that question asked by the pot bellied man, sitting under the umbrella, next to the attractive girl, reverberating in my mind.  “What you got big guy?”  I think the best answer to that question is simple.  Nothing.  I got nothing for you.

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Water flows downstream while inflation… not so much. 

Bob Wenzel reports from on the ground at Bitcoin 2013 while attempting to distinguish between members of the conference’s heavyweight crew and lightweight crew becomes increasingly difficult.  In so many words, Bob is reporting that Bitcoin systems will be fully government compliant as they connect with the Federal Reserve System and the dream of anonymity floats down from the Head of the Charles going the way of “social norms” at Facebook (at least for 99.9% – identical twins withstanding).  Think of it as Paypal where you don’t know what the value of your currency is and therefore your transactions will need to be run through a real time moneychanger to determine the price and in the case of the Winkelvoss Twins driver’s license photos won’t be sufficient Patriot Act “know thy customer” verification.

Then again, Dave can envision a sort of Bitpay combined with MIT’s Billion Prices Project (http://bpp.mit.edu/) where eventually the price relativity is divorced from the U.S. dollar (ala Mervyn King’s divorced currency model – http://tradewithdave.com/?s=%22divorced+currency%22+) and rather than watching your Bitcoin values fluctuate against your Pay Pal values you simply view the price discovery mechanism through the double coincidence of wants looking glass known as “Daily Online Price Index Computation.”

From the MIT “organic” website:

Our data are collected every day from online retailers using a software that scans the underlying code in public webpages and stores the relevant price information in a database. The resulting dataset contains daily prices on the full array of products sold by these retailers. Our data include information on product descriptions, package sizes, brands, special characteristics (e.g. “organic”), and whether the item is on sale or price control.

http://www.economicpolicyjournal.com/2013/05/the-not-so-impressive-winklevoss-twins.html

From Bob:

As a representative for CoinLab, an in development money- virtual exchange operator, told me, “Once we are through getting all the necessary government licenses at the state and federal levels, we will be up and running, but we won’t open any accounts until we have proof as to who the account holder is.”

From Dave:

Before I could even consider opening an account for a Winkelvoss, they’re going to need to be chipped like my Portuguese Water Dog.  The fact that a Biometric Database of All Adult Americans Hidden in Immigration Reform came along in the nick of time must be a real relief to all those Silicon Valley investors piling on.  Sometimes art imitates life, like when Armand Hammer bought stock in Armand Hammer baking soda (no relation to his name?) and great grandson Armie Hammer played both the Winkelvoss twins in the movie Social Network, so a single chip would suffice for Hollywood.

http://www.wired.com/threatlevel/2013/05/immigration-reform-dossiers/

Hat tip to Kim Munson

If you ask Dave, there sure seems to be a lot of things converging around the value of those new Benjamins. Whether you’re talking Euros or Dollars or Bitcoin, all roads seem to be headed towards 100.

From Wikipedia (Church & Dwight Co.) While the brand name (Arm & Hammer Baking Soda) was not based on his name, the late Armand Hammer was a minority shareholder in Church and Dwight in his later years and served on the company’s board of directors. Just a coincidence folks. Just a coincidence.

http://money.cnn.com/magazines/fortune/fortune_archive/1996/11/11/218180/

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The Battle of Bretton Woods where you win the currency battle, but lose the currency war.                         photo: Shankarnikhil88

Why There Will Be No New Bretton Woods:

http://www.cfr.org/economics/why-there-no-new-bretton-woods/p30096

Council On Foreign Relations Floats Neo-Bretton Woods to Create a New Monetary System

http://www.dailybell.com/29110/Shock-CFR-Floats-Neo-Bretton-Woods-to-Create-a-New-Monetary-System

“Should become the gold standard on its topic.”
–New York Times

(Dave comment:  Why just be the gold standard on the topic when it can be the new fractionally reserved gold standard?)

“[A] splendid book . . . If you want to understand the gold standard, the always-doomed dollar standard, why the IMF is in Washington, how the US deliberately humiliated Britain over debt before, during and after WWII as part of a very real currency war (but also out of genuine anti-colonial sentiment that the British never understood), this is the book for you

–Barbara Rockefeller, Harriman Intelligence

(Dave comment:  Harriman and Rockefeller?…. where’s the Bush name to round out the triangle?)

“With calls for a new Bretton Woods following the financial crisis of 2008 and escalating currency wars, the book also offers valuable, practical lessons for policymakers today.”  The CFR’s website.

(Dave comment:  So which is it?  A new Bretton Woods or no new Bretton Woods?)

http://www.cfr.org/economics/battle-bretton-woods/p29748

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What can I say except the reset is near?  The coordination that is taking place right now is truly amazing… and coincidentally no photograph has ever been published of Bruno Iksil.  How convenient.

Part 1 is here: http://tradewithdave.com/?p=16576

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Niels Bohr, Werner Heisenberg, and Wolfgang Pauli talking in the Niels Bohr Institute lunchroom presumably about the what would happen if Dee Hock was successful in building the VISA payment system on a network using a Rochdale plan and the implications to chaos theory of the bitcoin blockchain.

(from the Wall Street Journal)

Bitpay Raises $2 Million

Also joining this round is Max Keiser’s fund Heisenberg Capital, a London-based fund focused on bitcoin companies. The terms of the seed round were not disclosed, although 100% of the existing seed shareholders exercised their pro rata rights to maintain their ownership percentage in BitPay.

“We were not looking to raise any capital until later this year, but we could not ignore the opportunity to have Founders Fund involved with BitPay,” says Tony Gallippi, co-founder and CEO of BitPay. “There’s no single investment firm we would rather have on our team right now than Founders Fund.”

http://online.wsj.com/article/PR-CO-20130516-908741.html?mod=googlenews_wsj

Dee calls it “chaordic” while Dave just calls it “trading.”

http://tradewithdave.com/?p=12962

http://tradewithdave.com/?p=16045

http://tradewithdave.com/?p=11489

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Most people don’t know it, but Jesus had one heck of a right… and a pretty good uppercut too.  Notice the original Mt. Gox version 1.0 table overturned.

Things are heating up in the Bitcoin/JPMorgan/Means Testing world and if you ask Dave the Fed is officially in the game via the Department of Homeland Security.

Dave has written numerous times in the past about the Hegelian synthesis of Bitcoin.  To put it in a single sentence, Bitcoin loses a bit of its utility if the internet goes away and the internet goes away if PGP gets cracked.  The irony of that, if you ask Dave, is that the only distributed computing network with the power to hack PGP will be the Bitcoin network in the next couple of decades.  Hmmm?

Max Keiser has been quite discerning if you ask Dave when it comes to his correlation between Bitcoin and Jesus Christ.  Max has referred to the most likely fictional Satoshi Nakamoto (supposed creator of Bitcoin) as “the cyberchrist”.  Jesus Christ did turn over the tables of the money changers in the temple.  Bitcoin appears to be turning over the money changers at the Fed, at least to the point that they have rousted certain individuals in Maryland from their prosecutorial slumber (most likely the result of the Breurian ripple effect) long enough to issue a Department of Homeland Security warrant.  To add insult to the $17 million just invested in Dwolla last month, Janet Napolitano went so far as to injure the money changers over at Mt. Gox via a confidential informant/customer in Maryland.  I guess it’s time for a Patriot Act refresher course in “know thy customer.”

Forbes play-by-play here: http://www.forbes.com/sites/kashmirhill/2013/05/15/the-feds-are-cracking-down-on-mt-gox-not-on-bitcoin/

Arstechnica on what happens if you are a money transmitter without a license: http://arstechnica.com/tech-policy/2013/05/feds-reveal-the-search-warrant-that-seized-mt-gox-account/

TOKYO – JAPAN – May 15, 2013 – MtGox has read on the Internet that the United States Department of Homeland Security had a court order and/or warrant issued from the United States District Court in Maryland which it served upon the Dwolla mobile payment service with respect to accounts used for trading with MtGox. MtGox takes this information seriously. However, as of this time MtGox has not been provided with a copy of the court order and/or warrant and does not know its scope and/or the reasons for its issuance. MtGox is investigating and will provide further reports when additional information becomes known.

Regards,
Mt.Gox Co. Ltd Team.

Adam L. Penenberg for Pando Daily on the religion of Bitcoin:

http://pandodaily.com/2013/05/15/give-me-that-old-bitcoin-religion/

Here’s how Dave commented this morning relative to Adam’s article on Bitcoin:

Dave on christ ver 2.0

http://tradewithdave.com/?p=16060

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President Obama’s half-brother is plenty busy taking care of his twelve wives.  Thank goodness the IRS liked his non-profit foundation enough to streamline the application process in time for tea. 

Looks like the idea of throwing a tea party wasn’t exclusive to the Boston Harbor and the Oval Office.  From all appearances they were trying to throw one in Liberty Township, Ohio too. That is until the IRS came along.

Courtesy of The Hill:

http://thehill.com/images/stories/news/2013/05_may/14/irs-letter-to-teaparty.pdf

Considering the context of President Obama’s call for an investigation into the IRS and their targeting of groups associated with the Tea Party, you may want to reconsider the “agenda” of this documentary.  Dave’s position is fairly simple.  The “free market” of classic liberalism built atop the ideas of Adam Smith and John Locke seems to have run its course.  Dave would suggest that ideas such as civil liberties, limited government and the rule of law have stood atop the cornerstone of the Ten Commandments or what is often termed “Judeo-Christian principles” although that language came along much later.

From the White House:  May 14, 2013:  Statement by the President of the United States

I have now had the opportunity to review the Treasury Department watchdog’s report on its investigation of IRS personnel who improperly targeted conservative groups applying for tax-exempt status.  And the report’s findings are intolerable and inexcusable.  The federal government must conduct itself in a way that’s worthy of the public’s trust, and that’s especially true for the IRS.  The IRS must apply the law in a fair and impartial way, and its employees must act with utmost integrity.  This report shows that some of its employees failed that test. 

I’ve directed Secretary Lew to hold those responsible for these failures accountable, and to make sure that each of the Inspector General’s recommendations are implemented quickly, so that such conduct never happens again.  But regardless of how this conduct was allowed to take place, the bottom line is, it was wrong.  Public service is a solemn privilege.  I expect everyone who serves in the federal government to hold themselves to the highest ethical and moral standards.  So do the American people.  And as President, I intend to make sure our public servants live up to those standards every day.

end

Basically that system doesn’t function when personal accountability is not an acceptable concept and personal accountability is fundamentally possible when you forgiveness of sins is freely available.  In the absence of forgiveness there is an absence of personal accountability and since man is imperfect it is that access to forgiveness, in the eyes of God, that essentially made classical liberalism functional since the industrial revolution.  From all appearances, it is not going to be able to stand up to technology-enabled behavioral economics and libertarian paternalism.

What’s the answer.  Although Dave doesn’t deny that his viewpoint comes from “the right”, I have no confidence that the current false dichotomy is going to hold.  Ultimately Dave’s foundation is based on Isaiah Chapter 9.

⁶ For unto us a child is born, unto us a son is given: and the government shall be upon his shoulder: and his name shall be called Wonderful, Counsellor, The mighty God, The everlasting Father, The Prince of Peace.

⁷ Of the increase of his government and peace there shall be no end, upon the throne of David, and upon his kingdom, to order it, and to establish it with judgment and with justice from henceforth even for ever. The zeal of the Lord of hosts will perform this.

The Agenda

http://vimeo.com/user2695043/agendamovie

In other new out of Canada, the same IRS representative who was responsible for targeting anyone with the name Tea Party in their name, was able to streamline the President’s brother’s foundation for its tax exempt status in less than 30 days.  In the spirit of Citizens United, Lois Lerner of the IRS made it very clear that what is good for the Too Big To Fail banks in avoiding cooking anyone’s actual goose is also good for helping the IRS find its voice.  Take a gander.

“That was absolutely incorrect, it was insensitive and it was inappropriate. That’s not how we go about selecting cases for further review.”  “The IRS would like to apologize for that.”

Lois Lerner of the IRS explaining what the IRS would like to do, if only the IRS could talk or sign letters itself, not to mention being good at math.

http://bigstory.ap.org/article/irs-apologizes-targeting-conservative-groups

If the IRS could actually apologize, then it should be able to sign its own letters.  Then why did Lois sign this letter approving the President’s brother’s foundation in record time.  I bet Ms. Lerner would have liked it if the IRS had liked to sign the letter too.

http://www.barackhobamafoundation.org/letter.pdf

Do you know Jon Stewart of The Daily Show on Comedy Central?  Dave doesn’t have cable, but he knows who Jon is and his boss Sumner.  You have to give Jon credit for how he handled this.  You see Jon is a big supporter of government and he didn’t like this IRS thingy because it makes him look bad.  So how did Jon deal with it?  He put a segment on his show criticizing the White House and the IRS for basically… uh… let’s call it fascism…. or uh…. tyranny.  Okay tyranny… that’s better.  Then to make sure the video didn’t get passed around too much or so that no kids who are forming their beliefs would have a chance to watch it he filled it with the most foul-mouthed expletives imaginable…. over and over and over again.

So, Dave can’t post Jon’s segment here on the site courtesy of Comedy Central and Sumner Redstone.  That wouldn’t work for Dave because Dave’s kids, including his ten year old and who knows my future grandchildren (if I am so blessed) may want to read the blog.  So John was successful in eliminating a huge percentage of the world that doesn’t want to hear him describe his relationship with someone’s mother (maybe his own) so near Mother’s Day.  Dave’s warning you not to click on this if you’re mother is anywhere nearby.  Dave has actually had dealings with Sumner before and knows just how low he can stoop.

http://www.thedailyshow.com/watch/mon-may-13-2013/barack-trek–into-darkness

If you are interested in a more in-depth review of Dave’s concepts relating to forgiveness of sins and how it pertains to the structure of governments and their ultimate demise (essentially the raison d’etre for this blog), here you go.

http://tradewithdave.com/?s=%22karl+marx%22+

http://tradewithdave.com/?s=%22libertarian+paternalism%22+

For more on whether or not the IRS is investigating your Tea Party related activities:

http://en.wikipedia.org/wiki/IRS_Tea_Party_investigation

On how to get your non-profit IRS status streamlined:

http://dailycaller.com/2013/05/14/irs-official-lerner-approved-exemption-for-obama-brothers-charity/

http://canadafreepress.com/index.php/article/55193

Big Brother doesn’t have time to watch you because he’s watching over twelve wives and the Barack H. Obama foundation:

http://www.dailymail.co.uk/news/article-2290803/My-little-brother-Barack-Obama-Hes-12-wives-accused-o-beating-wants-President-Kenya–Meet-Obamas-VERY-outspoken-sibling.html

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There are more than a few things about this LIBOR presentation that concern Dave. Come to think of it, there’s nothing about this presentation that doesn’t bother me. To summarize, on the one hand there is a holier than thou air surrounding the “public” banking and regulatory officials from The City that represents the idea that making money through the competitive process is somehow below their pay grade. Extracting profits through free market capitalism is a dirty business and one that they (the ones who speak while barely exerting the energy required to move their mouth) didn’t want to admit they were involved in, but were glad to accept the tax revenue and the fees associated with doing business.

On the other hand, the banks (the private side) tried to put themselves forward as some sort of model citizen rather than simply admitting to being involved in every form of business from trash collection to culture creation and bid rigging. The fact something as subjective as “culture” on the private side can be blamed for everything and that the enforcement remedy is yet another financial fine where proceeds are handed over to the public side (smells like the world’s oldest profession to Dave, the one where everything is for sale if the price is right) is a clear display of the effort to do anything and everything to avoid accountability.  Count on the BBC’s Hegelian synthesis to leave you wondering what exactly happened.

As far as putting trust in banks, institution or government for that matter is laughable if you ask Dave. Who could or would ever put trust in an inanimate object? Up until this point, the whole idea of who we (including Barclay’s Quakers) are putting our trust in is printed right on the face of the world’s reserve currency: In God We Trust. Trust can only be realized between two people or a person and their Creator. Sure, it is people that make up an institution and the trust is manifest in business-to-business and person-to-business transactions. But to try to convince me that somehow “culture” can be manifest in an entity rather than in individuals is nothing short of insanity and as far as what’s printed on the face of money, in the all electronic form, they will be able to do away with that pesky recognition of God altogether.

Clearly, these models are in the final throes of life. If you ask Dave, this BBC presentation is nothing more than the road map towards Mervyn King’s vision of a divorced currency model brought to the TV screen. It may not show us how to get there, but it clearly shows that the current system based on two parallel roads of regulation and commerce is corrupt. Is the divorced currency model the answer? If you’re a loyal Dave reader, then you know how I feel about that or you can read it for yourself (http://tradewithdave.com/?s=%22divorced+currency%22+)

Honesty, integrity and plain dealing are, and have always been, something that only people can do. Government cannot do it. Institutions, either public or private, cannot do it. How long will it take to restore trust in an inanimate form or select animate forms such as the CFTC’s Gary Gensler? Don’t hold your breath.  Trust in the Lord with all your heart and lean not unto thy own understanding.

Then again, maybe you will choose to put your trust in the Lord Mayor of the City of London as he explained that the rule of law just isn’t good enough when it comes to dealing with eventualities.  According to Lord Mayor we need “culture” and as the Mayor of the sovereign, you can choose to put your trust in a government of men rather than one of laws and the promise of those men (issued from some pretty nice offices if I say so myself) to once and for all wrestle down that greased pig known as business.

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Captain Nemo and the professor consider the CME’s ultimate price discovery version of the lost city of Atlantis

In case you missed it, Terry Duffy and your friends over at the CME Group did some “self-certifying” back on April 26, 2013 with your favorite regulator Bart Chilton at the Commodity Futures Trading Commission.  Why did the CME self-certify?  That’s simple.  The self-certification, namely “Trading At Settlement”, according to Team Terry “is being adopted based on requests from market participants.”  Why else would you self-certify?  Dave can’t think of any better reason.  As to the question of just why is the CME even allowed to self-certify, I guess that’s a question for your governor or your congressman, or maybe your broker or maybe Jon Corzine if you run into him this summer in the Hamptons since he was kind of a Governor-Senator-Broker-Bundler all wrapped up in one man.

What is Trade At Settlement exactly?  If you ask Dave, I would call it the “sandbagging rule.”  You see Dave has been a sales manager more than once and Dave can sniff out a sandbagger quicker than you can say “where’s my allocated account?”  What is sandbagging exactly?  Sandbags can be used to keep a flood out, but they can also be used to keep a flood in.  Let’s take a simple example of sandbagging.  Let’s say Dave is sales managing a car dealership and that Dave’s paying $500 bonuses to every salesman who sells fifteen cars per month.  If you sell sixteen cars the first month and fourteen cars the next month then you would only get the $500 bonus in the first month even though you sold thirty cars in two months.  It doesn’t take long to figure out if someone is sandbagging a car sale on the last day of the first month in an attempt to move that sale to the second month.  Maybe the salesman calls in sick.  Maybe the salesman asks the customer to come back tomorrow.

If the salesperson is attempting to defy that verse from the Holy Scriptures (Matthew 6:24) “No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.”  Maybe the salesperson might go so far as to tell the customer “Hey come back tomorrow and I’ll slide you an extra Benjamin when you pick up the keys”.  That my friends is a classic example of “Trading At Settlement” or making a trade within a trade.  When you Trade With Dave At Settlement, the price discovery process which occurred when the customer and the salesperson “shook on the deal” is no longer the genuine deal because now the car has been sold for $100 less than the original price, and an extra $500 in commission has been paid.  Who’s to know the difference?

Well Dave knows and believe me so does every other sales manager at the CME.  Dave has not only been a sales manager he’s also been a VP of Marketing and a company President and he’s had more than one sales manager working for him who, if the salesperson was willing to split yet another Benjamin with the sales manager, the sales manager would then comply with the salesperson’s scheme.  I guess you could describe a scheme where the salesperson and the sales manager were colluding to extract an additional $500 in bonus money from the company at a cost of $200 to the salesperson individually as a scheme that would be “adopted based on requests from market participants” if those market participants could make extra money.  Why not, especially if you can self-certify?

Let’s take a look at what other forms of self-styling went on over at the CME around the same time as the self-certification hair styling (also known as the business mullet policy – that being all business in the front while there’s a party in the back) was going down.

From Harvey Organ: http://harveyorgan.blogspot.com/2013/04/silver-and-gold-risesilver-oi-rises-to.html

Do you remember April 25th?  That was the day when the Comex reported that JP Morgan’s eligible gold fell from 402.4K ounces to 141.6K ounces or 65% in 24 hours.  This was the lowest recorded level since JPM’s “vaulting capabilities” were touted and the vault opened in late 2010 (http://tradewithdave.com/?p=5814).

Did anyone notice that on May 8th there was a silver “adjustment” out of Scotia for 573,219.091 ounces?  No destination for the mother lode was offered as an explanation of the adjustment.  It appeared to be an accounting error, at least according to Harvey Organ.  The fact that the amount is exactly the same and exactly two weeks have gone by… nothing to see here folks… move along.

What is the definition of Trading At Settlement exactly?  Here you go, according to some financial glossary and the initiator of adoptions based on requests from market participants, but not according to Trade With Dave’s rogue salesman metaphor.  Here’s the official definition:

Trading at settlement is an exchange rule which permits the parties to a futures trade during a trading day to agree that the price of the trade will be that day’s settlement price or the settlement price plus or minus a specified differential.  What differential exactly?  At the CME,  TAS transactions may be executed at the current day’s settlement price or at any valid price increment ten ticks higher or lower than the settlement price.

How did the folks over at the CME manage to explain to the folks over at the CFTC via email on the very day in question why they were “lastly” establishing the Trading At Settlement block trade minimum threshold?  Here’s the explanation in their own words:

Lastly, the establishment of TAS block trades in Gold and Silver futures at the existing block trade minimum threshold of 25 contracts for each product is being adopted based on requests from market participants.

This rule change was made on April 26th the day after the noted transfers and the full documentation of the notice to the CFTC is here:

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If you ask Dave, Mark Carney is one nervous dude.

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