Tuesday, May 28, 2024

The Debtors and the Savers 2024

One of the curious things about political opinions is how often the same people line up on opposite sides of different issues. The issues themselves may have no intrinsic connection with each other. They may range from military spending to drug laws to monetary policy to education. Yet the same familiar faces can be found glaring at each other from opposite sides of the political fence, again and again. It happens too often to be coincidence and it is too uncontrolled to be a plot. A closer look at the arguments on both sides often shows that they are reasoning from fundamentally different premises. These different premises—often implicit—are what provide the consistency behind the repeated opposition of individuals and groups on numerous, unrelated issues. They have different visions of how the world works. […]

Rather than attempt the impossible task of following all these ramifications in each of the myriad of social visions, the discussion here will group these visions into two broad categories—the constrained vision and the unconstrained vision. These will be abstractions of convenience, recognizing that there are degrees in both visions, that a continuum has been dichotomized, that in the real world there are often elements of each inconsistently grafted on to the other, and innumerable combinations and permutations. With all these caveats, it is now possible to turn to an outline of the two visions, and specifics on the nature of man, the nature of knowledge, and the nature of social processes, as seen in constrained and unconstrained visions. […]

The two great revolutions in the eighteenth century—in France and in America—can be viewed as applications of these differing visions, though with all the reservations necessary whenever the flesh and blood of complex historical events are compared to skeletal theoretical models. The underlying premises of the French Revolution more clearly reflected the unconstrained vision of man which prevailed among its leaders. The intellectual foundations of the American Revolution were more mixed, including men like Thomas Paine and Thomas Jefferson, whose thinking was similar in many ways to that in France, but also including as a dominant influence on the Constitution, the classic constrained vision of man expressed in The Federalist Papers. […]

With all the complex differences among social thinkers as of a given time, and still more so over time, it is nevertheless possible to recognize certain key assumptions about human nature and about social causation which permit some to be grouped together as belonging to the constrained vision and others as belonging to the unconstrained vision. Although these groupings do not encompass all social theorists, they cover many important figures and enduring ideological conflicts of the past two centuries. […]

William Godwin's elaboration of this unconstrained vision in his Enquiry Concerning Political Justice drew upon and systematized such ideas found among numerous eighteenth-century thinkers—Jean-Jacques Rousseau, Voltaire, Condorcet, Thomas Paine, and D'Holbach being notable examples. This general approach was carried forth in the nineteenth century, in their very different ways, by Saint-Simon, Robert Owen, and by George Bernard Shaw and other Fabians. Its twentieth-century echoes are found in political theorists such as Harold Laski, in economists like Thorstein Veblen and John Kenneth Galbraith, and in the law with a whole school of advocates of judicial activism, epitomized by Ronald Dworkin in theory and Earl Warren in practice. […]

This constrained view of human capacities found in Adam Smith is also found in a long series of other social thinkers, ranging from Thomas Hobbes in the seventeenth century, through Edmund Burke and the authors of The Federalist Papers among Smith's contemporaries, through such twentieth-century figures as Oliver Wendell Holmes in law, Milton Friedman in economics, and Friedrich A. Hayek in general social theory.

Not all social thinkers fit this schematic dichotomy. John Stuart Mill and Karl Marx, for example, do not fit, for very different reasons, as will be noted in Chapter 5. Others take midway positions between the two visions, or convert from one to the other. However, the conflict of visions is no less real because everyone has not chosen sides or irrevocably committed themselves.

Despite necessary caveats, it remains an important and remarkable phenomenon that how human nature is conceived at the outset is highly correlated with the whole conception of knowledge, morality, power, time, rationality, war, freedom, and law which defines a social vision. These correlations will be explored in the chapters that follow.

Because various beliefs, theories, and systems of social thought are spread across a continuum (perhaps even a multi-dimensional continuum), it might in one sense be more appropriate to refer to less constrained visions and more constrained visions instead of the dichotomy used here. However, the dichotomy is not only more convenient but also captures an important distinction. Virtually no one believes that man is 100 percent unconstrained and virtually no one believes that man is 100 percent constrained. What puts a given thinker in the tradition of one vision rather than the other is not simply whether he refers more to man's constraints or to his untapped potential but whether, or to what extent, constraints are built into the very structure and operation of a particular theory. Those whose theories incorporate these constraints as a central feature have a constrained vision; those whose theories do not make these constraints an integral or central part of the analysis have an unconstrained vision. Every vision, by definition, leaves something out—indeed, leaves most things out. The dichotomy between constrained and unconstrained visions is based on whether or not inherent limitations of man are among the key elements included in the vision.

The dichotomy is justified in yet another sense. These different ways of conceiving man and the world lead not merely to different conclusions but to sharply divergent, often diametrically opposed, conclusions on issues ranging from justice to war. There are not merely differences of visions but conflicts of visions.

- THOMAS SOWELL, A CONFLICT OF VISIONS: Ideological Origins of Political Struggles

The Debtors and the Savers are also abstractions of convenience, a dichotomized continuum justified by the not merely different, but sharply divergent, often diametrically opposed, conclusions on a wide range of issues that divide the two camps, which leads to conflict, and ultimately ends in either tears, bloodshed, or both:

In the first Debtors and Savers back in 2010, I agreed with Karl Marx’s statement that “the history of society is the history of class struggle,” but I disagreed with his delineation of the classes as the workers versus the capitalists, the rich versus the poor, or the haves versus the have-nots. My delineation was “the easy money camp” or “the redistributors,” which I dubbed the Debtors for short, versus “the hard money camp” or “the live within their means and take personal responsibility for their own future camp,” which I dubbed the Savers for short.

Marx and I merely have two different perspectives on history. But Marx’s perspective is wrong yet almost universally held, dangerous because it often leads to bloodshed, and politically expedient to the Left because it rousts envy in the have-nots. Meanwhile, my perspective, being the correct yet little known one, actually reveals how Freegold is the elegant solution to one of the oldest conflicts in the world. Instead of trying to force hard money on the easy money camp to keep their savings from devaluing, the Savers will simply stop saving in money, debt and financial instruments.

They will stop, because they will get burned in a way that will live in the collective memory forever, or at least for generations. Easy money systems, as I discussed in the post, have a typical profile of gradually transferring purchasing power from the Savers who save in money, debt and financial instruments, to the Debtors. Then, at the very end of the system, they have one final, very rapid wealth transfer, from paper’s remaining purchasing power into real things, primarily real wealth items that can be possessed, because physical possession is wealth’s defining attribute, especially at such times as the end of an easy money regime.

This change won’t deprive the Debtors of money to borrow, because if there’s one thing we know about easy money, it’s that you can easily make more of it. What it will do, however, is to keep the Saver’s savings from being disproportionately drained of value by an expandable monetary system. This will solve, once and for all, one of the oldest conflicts in the world, that of the Debtors and the Savers trying to use the same monetary unit, whether easy or hard, for both borrowing and saving, which has always ended in either bloodshed or tears for the Savers.

Hard money systems tend to end in violence, uprisings, bloodshed and even war, as I discussed in the post, while easy money systems tend to end in monetary collapse and financial devastation for unprepared Savers. Today we are at the end of the longest-running easy money system ever, so “Choose your camp wisely,” as I said in the post, “and prepare to own the future.”


Freegold is kind of like the middle ground, or center, between the two camps. It is the compromise, the obvious solution, but that doesn’t mean that I’m a centrist when it comes to politics. I can see that, as Ari said, we need our money to be “easy” in order to set gold free to be the “hard” wealth reserve par excellence that is needed to keep the peace. We get our “hard” secondary money, let them have their “easy” primary money, and learn to appreciate the elegance of the arrangement!

In fact, since most of us intuitively hail from the hard money camp, it’s a healthy exercise to embrace the idea of money being even “easier” in Freegold than it is today. Easy money saps value from every monetary unit on record, so today that disproportionately taxes the savers through the financial system, but in Freegold it won’t. So I don’t expect money to be any “harder” in Freegold. Since it will have a smaller pool of value to sap from, it may even be “easier” than today’s money.

As FOA said, we have always formed “tribes” or groups, in which we trade some measure of our personal freedom of choice for the security of being part of a larger group. Within that group, subgroups tend to jockey for control in order to bend the rules in their favor, in order to regain some of what they perceive they have lost by being part of the group, at the expense of other subgroups. It’s just the way we are as a species, and understanding human nature and how to work within it, rather than forever struggling to change it, is really what Freegold is all about.

As for the two most general subgroups, most would agree they are the political Left and Right. But from a monetary, economic and financial perspective, we always see the divide framed as the rich versus the poor. Yet there are rich and poor on both sides of the political spectrum, or ants and grasshoppers in each of our nations as Yanis said, so obviously we need a better framework of understanding if we are to comprehend what is actually unfolding.

That framework is the Debtors and the Savers, as I have defined them in terms of easy versus hard money preference, and in terms of social versus personal responsibility being primary. This understanding also blends extremely well with the history of the political Left and Right, revealing an undeniable connection between political and monetary evolution and change.

With this view, we can see how the rise of Progressivism to absurd levels has paralleled the rise of the dollar-based international monetary and financial system to its own absurd levels. It’s easy to see what constitutes Progressivism, but if you are willing to buy the idea that both have peaked, then it’s important to also understand what constitutes the $IMFS. Because while Conservatism stands ready to take control back from Progressivism, there’s no way in hell that we’re going back to hard money.

What most fundamentally constitutes the $IMFS is simply the idea that money, debt and financial instruments constitute wealth. As Randy said in Debtors v. Savers III, “Instead, your wealth, properly measured, is the tangibles you’ve accumulated, the store of resources you’ve saved. And among the world of tangibles, gold is globally the most liquid — the most universally recognized, honored, and accepted.” This is what will change monetarily: the simple idea of what constitutes wealth.

If you are still struggling with this concept, just think about what it actually is that makes the $IMFS seem so absurd today, not just in the US, but all around the world. It is the perception of wealth held in money, debt and financial instruments that is so disproportionate to the real economy. And not just the size, but the rate and direction of change. The perception of wealth can expand in the $IMFS even while the real economy is shrinking. This is why Another always said, “Your wealth is not what your money say it is.”

So, basically, Freegold is not about us versus them, it’s about living together without monetary conflict. And because of pride, envy and the lot of them, monetary conflict is indeed at the heart of these political conflicts. So while it might be a bit much to say Freegold will solve every problem, I think it’s fair to say it will at least reverse the incentives and send us “progressing” in a better direction.

-The Debtors and the Savers 2016

I wrote that post eight years ago, to the day. Trump had just, days before, become the presumptive nominee. Bernie Sanders was leading Hillary on the other side, but just barely. Seth Rich, a Bernie supporter, was still alive. The DNC emails had not yet been leaked to Julian Assange. Nelle Ohr, aka KM4UDZ, would get her Ham radio license exactly two weeks later, on May 23, 2016, so that she could coordinate the fabrication of a Russian kompromat file on Trump with Christopher Steele in England. And over in England, the Brexit vote was still a month and a half away.

Here is one of the images from that post:
I wrote:

Over in Europe, the migrant crisis is the front line of "Progress" versus push-back. Of course Europe doesn't have the same idea of free speech as we do in America, so we don't get to hear as much from the conservative resistance as we do from the Progressives, who label anyone opposed to massive immigration from the Arab world, North Africa and the Middle East, as xenophobic, racist or worse. In some places, you can be arrested for simply saying the wrong thing about the crisis, or even just tweeting it.

We do get a glimpse, though, at what is developing over there. In Sweden, anti-immigration groups are labeled as Nazis, yet we continue to hear stories about these "no-go" zones which are essentially Muslim slums where even the police don't go. Such stories are considered racist and routinely suppressed inside Sweden, but just a few weeks ago, an Australian 60 Minutes crew was attacked in one of these areas, and published the video saying there are now 55 such no-go zones in Sweden. So apparently there are reasons other than being a Nazi to hold an anti-immigration stance in Sweden.

In Germany, just days ago, hundreds of "left-wing protestors" clashed with thousands of members of the Alternative fΓΌr Deutschland (AfD) party who were meeting in Stuttgart. The protestors chanted "Keep refugees, drive Nazis away!" But I looked into this group, and they appear to not be as "far-right" as some. They are actively trying not to attract more radical ultra-nationalists, they are fearful of being labeled "xenophobic or even racist," and have shied away from supporting similar groups as a result. They have, however, labeled Merkel's decision to accept a million migrants in 2015 as "catastrophic," they would like to ban the burqa and outlaw minarets (the towers from which Muslims announce obligatory prayer time five times a day) in Germany, and they are also opposed to gay marriage. Freakin' "Nazis" (yeah, right).

Two years later, to the day, I wrote The Debtors and the Savers 2018. A picture is worth a thousand words, so here are a few of the images from that post, to sort of summarize the post:

In chapter 5, Sowell explains how both Fascism and Marxism are hybrid visions. If you've ever noticed the irony in Antifa ("anti-fascists") actually being a bunch of fascists, or that Nazis (National Socialists) were actually socialists, or how the left is in league with actual Nazis in Ukraine, and has been since 2014, then this chapter is for you! Here are a few select excerpts:

Fascism, for example, heavily emphasizes surrogate decision-making but is not an unconstrained vision, because neither the mode of decision-making nor the mode of choosing the leader is articulated rationality. It is not merely that non-fascists find fascism non-rational, but that fascism's own creed justifies decisive emotional ties (nationalism, race) and the use of violence as political driving forces. It is only when both the locus of discretion and the mode of discretion consistently reflect the underlying assumptions of either the constrained vision or the unconstrained vision that a given social philosophy can be unambiguously placed under either rubric. […]

A given vision may fall anywhere on the continuum between the constrained and unconstrained visions. It may also combine elements of the two visions in ways which are either consistent or inconsistent. Marxism and utilitarianism are classic examples of hybrid visions, though in very different ways.

Marxism The Marxian theory of history is essentially a constrained vision, with the constraints lessening over the centuries, ending in the unconstrained world of communism. However, at any given time prior to the advent of ultimate communism, people cannot escape—materially or morally—from the inherent constraints of their own era. It is the growth of new possibilities, created by knowledge, science, and technology which lessens these constraints and thus sets the stage for a clash between those oriented toward the new options for the future and those dedicated to the existing society. This was how Marx saw the epochal transitions of history—from feudalism to capitalism, for example—and how he foresaw a similar transformation from capitalism to communism.

This hybrid vision put Marxism at odds with the rest of the socialist tradition, whose unconstrained vision condemned capitalism by timeless moral standards, not as a once progressive system which had created new social opportunities that now rendered it obsolete.

Marx spoke of "the greatness and temporary necessity for the bourgeois regime," a notion foreign to socialists with the unconstrained vision, for whom capitalism was simply immoral. As in more conservative compromises with evil, Marx's temporary moral acceptance of past capitalism was based on the premise that nothing better was possible—for a certain span of past history, under the inherent constraints of those times. His efforts to overthrow capitalism in his own time were based on the premise that new options now made capitalism both unnecessary and counterproductive.

But just as Marx differed from other socialists because he believed in inherent constraints, he also differed from those like Smith and Burke who conceived of these constraints as being fixed by human nature. To Marx, the constraints were ultimately those of material production and the frontiers of those constraints would be pushed back by the march of science and technology. Eventually, the preconditions would exist for the realization of goals long part of the socialist tradition, including the production and distribution of output "from each according to his ability, to each according to his needs." But no such principle could be simply decreed, without regard to the stage of economic development and the human attitudes conditioned by it.

According to Marx, it was only "after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly—only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banner: 'from each according to his ability, to each according to his needs!"' Marx's vision was therefore of a world constrained for centuries, though progressively less so, and eventually becoming unconstrained. Engels called this "the ascent of man from the kingdom of necessity to the kingdom of freedom."

Marxian doctrine, as it applies respectively to the past and the future, reflects the reasoning respectively of the constrained and the unconstrained visions. Looking back at history, Marxism sees causation as the constrained vision sees it, as systemic rather than intentional. In Engels' words, "what each individual wills is obstructed by everyone else, and what emerges is something that no one willed." When referring to the capitalist and pre-capitalist past, individual intention was as sweepingly rejected as a source of social causation in Marxism as in Adam Smith or any other exemplar of the constrained vision. Unlike many others on the political left, Marx did not regard the capitalist economy as directly controlled by the individual intentions of capitalists, but rather as controlling them systemically—forcing them to cut prices, for example, as technology lowered production costs, or even forcing them to sell below cost during economic crises. Similarly, bourgeois democratic governments were seen as unable to control insurgent political tendencies threatening their rule.

Marxian moral as well as causal conclusions about the past were consistently cast in terms of a constrained vision. For ancient economic and social systems, slavery and incest were considered by Marx to be historically justified, because of the narrower inherent constraints of those primitive times. Nor would the immediate post-revolutionary regime envisioned by Marx sufficiently escape constraints to decide deliberately when to end the state; rather, systemic conditions would determine when and how the state would eventually "wither away."

Only in some indefinite future was the unconstrained world, which Marxism sought, expected to be realized. In speaking of that world, and contrasting its desirable features with those of capitalism, Marx's language became that of the unconstrained vision. "Real" freedom of the individual, to be realized under Marxian communism, meant "the positive power to assert his true individuality," not merely the "bourgeois" freedom of the constrained vision—"the negative power to avoid this or that."

According to Marx and Engels:

Only in community with others has each individual the means of cultivating his gifts in all directions; only in the community, therefore, is personal freedom possible.

Looking backward, Marx and Engels saw the emergence of bourgeois freedom—political emancipation from deliberately imposed restrictions—as "a great step forward," though not "the final form of human emancipation." However, such freedom was "the final form within the prevailing order of things" that is, within the constrained world before communism, as conceived by Marx. Under capitalism, Marx considered the worker to be only "nominally free"; he was "compelled by social conditions" to work for the exploiting capitalist. Real freedom was the freedom of the unconstrained vision to be realized in a future unconstrained world. This freedom was defined as a result, in the manner of the unconstrained vision, not as a process in the manner of the constrained vision.

Marx was not inconsistent in using the concepts of the constrained vision for his analysis of the past and the concepts of the unconstrained vision for criticizing the present in comparison with the future he envisioned. His overall theory of history was precisely that constraints lessened over time, with the advancement of science and technology, and that social changes followed in their wake. As a system of contemporary political advocacy, it is an unconstrained vision—a theory that the ills of our time are due to a wrong set of institutions, and that surrogate decision-makers, making collective choices with specifically articulated rationality, are the proper locus and mode of discretion for the future. […]

The entire spectrum of social visions cannot be neatly dichotomized into the constrained and the unconstrained, though it is remarkable how many leading visions of the past two centuries fit into these two categories. Moreover, this dichotomy extends across moral, economic, legal, and other fields. This is highlighted by the fact that those economists, for example, who hold the constrained vision in their own field tend also to take a constrained vision of law and politics, while those with the unconstrained vision of law, for example, tend to favor economic and political policies which are also consistent with the unconstrained vision. This will become more apparent in the chapters that follow. Contemporary examples of this consistency across fields are no longer as numerous, simply because social thinkers who operate across disciplinary lines are not as numerous. The increasing specialization of modern times makes the kind of sweeping visions of the eighteenth century less common today. Contemporary visions are more likely to be confined to a particular field—"judicial activism" in law or laissez-faire in economics, for example—though there have been a small and dwindling number of twentieth-century thinkers, such as Gunnar Myrdal or Friedrich Hayek, whose writings on a wide range of issues have gone well beyond a single intellectual discipline. However, what makes a vision a vision is not its scope but its coherence—the consistency between its underlying premises and its specific conclusions, whether those conclusions cover a narrow or a broad range.

Nevertheless, despite the scope and consistency of both constrained and unconstrained visions, there are some other very important social visions—Marxism and utilitarianism, for example—which do not fit into either category completely. In addition, one of the hybrid visions which has had a spectacular rise and fall in the twentieth century is fascism. Here some of the key elements of the constrained vision—obedience to authority, loyalty to one's people, willingness to fight—were strongly invoked, but always under the overriding imperative to follow an unconstrained leader, under no obligation to respect laws, traditions, institutions, or even common decency. The systemic processes at the core of the constrained vision were negated by a totalitarianism directed against every independent social process, from religion to political or economic freedom. Fascism appropriated some of the symbolic aspects of the constrained vision, without the systemic processes which gave them meaning. It was an unconstrained vision of governance which attributed to its leaders a scope of knowledge and dedication to the common good wholly incompatible with the constrained vision whose symbols it invoked.

Adherents of both the constrained and the unconstrained visions each see fascism as the logical extension of the adversary's vision. To those on the political left, fascism is "the far right." Conversely, to Hayek, Hitler's "national socialism" (Nazism) was indeed socialist in concept and execution.

Inconsistent and hybrid visions make it impossible to equate constrained and unconstrained visions simply with the political left and right. Marxism epitomizes the political left, but not the unconstrained vision which is dominant among the non-Marxist left. Groups such as the libertarians also defy easy categorization, either on a left-right continuum or in terms of the constrained and unconstrained visions. While contemporary libertarians are identified with the tradition exemplified by F. A. Hayek and going back to Adam Smith, they are in another sense closer to William Godwin's atomistic vision of society and of decision-making dominated by rationalistic individual conscience than to the more organic conceptions of society found in Smith and Hayek. Godwin's views on war (see Chapter 7) also put him much closer to the pacifist tendency in libertarianism than to Smith or Hayek. These conflicting elements in libertarianism are very revealing as to the difference made by small shifts of assumptions.

Godwin's profound sense of a moral obligation to take care of one's fellow man never led him to conclude that the government was the instrumentality for discharging this obligation. He therefore had no desire to destroy private property or to have the government manage the economy or redistribute income. In supporting private property and a free market, Godwin was at one with Smith, with Hayek, and with modem libertarianism. But in his sense of a pervasive moral responsibility to one's fellow man, he was clearly at the opposite pole from those libertarians who follow Ayn Rand, for example. It was the power of reason which made it unnecessary for government to take on the task of redistribution, in Godwin's vision, for individuals were capable, eventually, of voluntarily sharing on their own. But were reason considered just a little less potent, or selfishness just a little more recalcitrant, the arguments and vision of Godwin could be used to support socialism or other radically redistributionist political philosophies. Historically, the general kind of vision found in Godwin has been common on the political left, among those skeptical of the free market and advocating more government intervention.

Logically, one can be a thorough libertarian, in the sense of rejecting government control, and yet believe that private decision-making should, as a matter of morality, be directed toward altruistic purposes. It is equally consistent to see this atomistic freedom as the means to pursue purely personal well-being. In these senses, both William Godwin and Ayn Rand could be included among the contributors to libertarianism.

The unconstrained vision is clearly at home on the political left, as among G. B. Shaw and the other Fabians, for example, or in Edward Bellamy's Looking Backward or in the contemporary writings of John Kenneth Galbraith in economics or of Ronald Dworkin and Laurence Tribe on the law. But the constrained vision, while opposed to such philosophies, is also incompatible with the atomism of thoroughgoing libertarians. In the constrained vision, the individual is allowed great freedom precisely in order to serve social ends—which may be no part of the individual's purposes. Property rights, for example, are justified within the constrained vision not by any morally superior claims of the individual over society, but precisely by claims for the efficiency or expediency of making social decisions through the systemic incentives of market processes rather than by central planning. Smith had no difficulty with the right of society to regulate individual behavior for the common good, as in fire regulations, for example, and Oliver Wendell Holmes declared that "the public welfare may call upon the best citizens for their lives."

Neither the left-right dichotomy nor the dichotomy between constrained and unconstrained visions turns on the relative importance of the individual's benefit and the common good. All make the common good paramount, though they differ completely as to how it is to be achieved. In short, it is not a moral "value premise" which divides them but their different empirical assumptions as to human nature and social cause and effect.

Another complication in making these dichotomies of social philosophy is that many twentieth-century institutions or legal precedents represent thinking that is "liberal" (in American terms) or social-democratic (in European terms), so that conservatives who oppose these institutions or precedents are often confronted with the argument that such things are "here to stay"— essentially a conservative principle. Those on the political right may thus end up arguing, on the ground of the political left, that certain policies are "irrational," while the left defends them as part of the accepted social fabric, the traditional position of the right. While these might be simply tactical debating positions in some cases, there is a very real philosophic difficulty as well. At the extreme, the long-standing institutions of the Soviet Union were part of the social fabric of that society, and communists who opposed reforming them were sometimes considered to be "conservative." Among fervent American supporters of the free-market principle, libertarians are often at odds with conservatives on welfare state institutions, including labor unions, which are now part of the American social fabric—an argument which carries little or no weight in libertarian thinking, though some conservatives find it important.

While it is useful to realize that such complications exist, it is also necessary to understand that a very fundamental conflict between two visions has persisted as a dominant ideological phenomenon for centuries, and shows no signs of disappearing. The inevitable compromises of practical day-to-day politics are more in the nature of truces than of peace treaties. Like other truces, they break down from time to time in various parts of the world amid bitter recriminations or even bloodshed.

The general patterns of social visions sketched in these chapters in Part I provide a framework for looking more deeply into the application of constrained and unconstrained visions to highly controversial issues involving equality, power, and justice in the chapters that follow in Part II. Finally, the role of visions will be assessed against related but very different concepts, such as "value premises" and paradigms.

Visions are lenses. They are how we view the world and human nature, and everyone's lens is unique. Sowell even says, "there are as many visions as there are human beings, if not more," yet we can delineate them into two groups that stay consistent through time, and across a wide range of issues, and are therefore in a constant state of conflict.

So, isn't it interesting that the most dangerous visions of the last two centuries, Marxism and Fascism, which killed millions of people, were hybrids?

In both cases, they were ultimately unconstrained visions, but they appropriated, or used, some aspects of the constrained vision. Perhaps that gave them cover, or disguise. In any case, both were gravely divisive, by rallying those of unconstrained vision against the rest, which led to a communist takeover in the Soviet Union and China, and the rise of the Nazis in Germany, and to war and mass murder.

It was also that they were incorrect delineations of the two sides who, throughout history, are always at odds with one another. Marx essentially delineated the past from the future, implying that human nature itself can change, or progress, from the constrained to an unconstrained vision. And for the leftists that call the right fascist, or Nazis, again, the delineation is wrong because it does not hold up over time. Fascism used extreme versions of aspects of the constrained vision, like nationalism, obedience and loyalty, to transition or progress from a constrained vision past to an unconstrained totalitarian government.

We are there again today, but with a twist.

Note that Sowell first published A Conflict of Visions in 1987, and the most-recent revision was published in 2007. Harvard Psychology Professor Steven Pinker, in his 2002 book The Blank Slate: The Modern Denial of Human Nature, calls Sowell's delineation the best theory given to date. That's just to point out that this dichotomy, or delineation, has been around for a while, and I find it consistent with the Debtors and the Savers.

The Debtors, the easy money camp, have the unconstrained vision. MMT, for example, is an unconstrained view of money. Hard money is a constrained view of money. The Savers, the hard money camp, have the constrained vision of human nature and the world.

According to Sowell, those with an unconstrained vision "distrust decentralized processes, believe there is an ideal solution to every problem, and that compromise is never acceptable. He refers to them as 'the self anointed.' They believe that there exist some people who are further along the path of moral development, have overcome self-interest and are immune to the influence of power and therefore can act as surrogate decision-makers for the rest of society." They are the central planners.

The constrained vision, on the other hand, "relies heavily on the belief that human nature is essentially unchanging and that man is naturally inherently self-interested, regardless of the best intentions. Those with a constrained vision prefer the systematic processes of the rule of law and experience of tradition. Compromise is essential because there are no ideal solutions, only trade-offs. Those with a constrained vision favor empirical evidence and time-tested structures and processes over intervention and personal experience. Ultimately, the constrained vision demands checks and balances and refuses to accept that all people could put aside their innate self-interest." (Wikipedia)

Freegold is a compromise.

Sowell writes: "The inevitable compromises of practical day-to-day politics are more in the nature of truces than of peace treaties."

Freegold is a peace treaty.

Money stays easy, and everyone uses money. So everyone contributes to government theft equally.

Gold stays hard, and only Savers use gold. It's a closed circuit, as retiring savers sell their gold to young savers.

The Freegold revaluation is something totally separate. It's a one-time thing. It's only going to happen once. You aren't going to get rich by simply holding gold within Freegold, but those who carry physical gold from this system to the next will "own the future," as I wrote back in 2010.

Today we are on the cusp of something really big. Everything in the past 4 to 8 years has been leading up to this moment. To help you visualize what I see coming, it's like we're on a train that is moving very fast. Up ahead, a dump truck loaded with boulders is parked on the tracks.

Four years ago, there was semi on the tracks. It turned out to be empty, and the train smashed right through it and kept on going. This next obstacle is different, though. For years now, I thought that the train would stop, or the truck would move, or the train would derail because it is going too fast, or run out of diesel. But none of that happened. The train just keeps speeding up, because those running the train, those in charge, have an unconstrained vision of the world.

That's the twist. In Russia, China, Germany, and even in the French Revolution, the unconstrained rose up and took power from the constrained, mostly by killing them. Today, the unconstrained already have all the power. That's the twist. The American Revolution was the opposite. Today is more like the latter than the former.

This is only half of the post. You can read the other half and the 389 comments under it at the Freegold Speakeasy. It was posted there on May 8. You can join the Speakeasy by subscribing in the side bar, or you can email me at fofoamail at gmail dot com.

And don't forget to buy gold from BullionStar using my affiliate link! 😘 πŸ‘‡


Thursday, March 14, 2024

Public Service Announcement

There's a new link in the side bar, to BullionStar. Most of you are probably familiar with BullionStar as a gold seller in Singapore, as well as host to bloggers like Ronan Manly and JP Koning.

What you may not know is that BullionStar recently expanded its business into the US. They now have three locations, Singapore, Texas and New Zealand. They now offer free shipping within the US, and custodial vault storage in all three locations. Shipping is guaranteed and fully insured, and insured vault storage costs 39 basis points per year, calculated daily. They are currently offering the first year of vault storage in Texas for free.

Torgny Persson is the owner and founder of BullionStar. In 2008, he started the Swedish bullion dealer, Liberty Silver. Then, in 2012, he moved to Singapore and started BullionStar.

Torgny has been a long-time reader of my blog, and he's been a member of the Speakeasy since it opened in 2015. In fact, I met Torgny in person, as well as Ronan Manly, at a money conference in Las Vegas a decade ago.

You'll notice four links under the BullionStar ad. The ad itself will take you to the .us website, or you can go directly to .com, or .co.nz. It doesn't technically matter which one you choose. You can pick your language and currency at the top right of the page. I checked, and their prices are right in line with APMEX. Their aim is to consistently have lower prices than APMEX and JM in general. Their prices adjust in real-time as the POG changes, and you can see prices in any currency: USD, EUR, Singapore dollar, Japanese Yen, GBP, AUD, Swedish Krona, New Zealand dollar, even BTC, BCH, ETH and Litecoin.

That's right, you can buy gold directly with your BTC at BullionStar!

You can take delivery anywhere in the world, but depending on your location, there may be a shipping charge. In the US, however, it's free shipping, usually within one or two days. And, like I said, they also offer secure, insured, allocated and segregated storage. All of their own inventory and customer inventory in Singapore, US and NZ is allocated and segregated. They even segregate fungible gold like coins, and they don't mix customer gold with the gold that's for sale.

Now, here's something they don't advertise on the website, but I asked, because some of my Speakeasy members have asked about offshore storage options, and I've recommended BullionStar because I know that Torgny understands the dynamics of Freegold and the overnight revaluation. And, now that they have three locations around the world, they will facilitate a location swap on a case-by-case basis.

So, say you buy $50K worth of gold and store it in their Singapore vault, and then in a year or two (or after Freegold), you change your mind and want to take delivery here in the US. BullionStar will facilitate a location swap from Singapore to the US, and then deliver your gold to you via insured, secure delivery.

Because all stored gold is allocated and segregated for the customer, there will be a cost associated with a location swap and delivery, but it's still a unique service that they can provide.

So, as you can see, BullionStar is a pretty unique offering, with three locations, storage and delivery, competitive pricing, they accept payment in any currency, even crypto, they are Freegold-friendly, and I now have the owner and his US representative, Jesse Colombo, at the Speakeasy. So Speakeasy members can ask them questions in the comment section, and have the confidence of knowing who they're dealing with, and that they're dealing with a gold dealer who understands Freegold. Because, frankly, buying gold over the internet makes a lot of people nervous (me included).

They also just started an affiliate program, and invited me to participate. The deal is this: If you buy gold through the links on this blog, then I get 25% of BullionStar's profit margin. That's a pretty generous share! You won't pay any more than you will elsewhere, and I'll get a cut. And if you buy enough that my commission would cover a Speakeasy membership, send me an email and let me know what you bought, and once I confirm it, I'll apply it to a Speakeasy membership fee, and let you in. My email address is on my profile page, which is linked in the side bar.

The links work by placing a 90-day cookie on your computer if you click through from one of my URLs, so if you are blocking cookies, it'll still work, but only if you buy during that session. Be sure to click through from here when you're ready to buy. The fourth link can be shared with anyone. So, if you convince a friend or relative to buy gold, you can give them that link and I'll get the credit.

I even shared that link with Craig Wright, who just lost the Satoshi trial today:

He may have lost, but that doesn't mean he's not Satoshi. Courts make bad decisions all the time, especially lately. So, if he is Satoshi (and I say if, but iykyk), then he could buy 4 of these 400 oz. good delivery bars...

...or 50 of these kilo bars, with just one of the thousands and thousands of 50-coin blocks from 2010 that he has hiding in plain sight:

That's right, a kilo of gold right now costs the same as 1 BTC. BTC to gold right now, especially for someone like Satoshi whose cost basis for his BTC was almost nothing, would be the most epic swap in the history of the universe. It would be like hitting the Mega-millions lottery twice. The timing would be godlike. Trading BTC at the ATH, right before the bubble pops, for gold, right before the Freegold revaluation. That's the kind of trade that would make it into history books. That's how to become a true legend. And you can too, if you have some BTC. Just think about it. It's the kind of move your grandchildren and their grandchildren will be talking about for generations.

And if you do it at BullionStar with one of my links, then I can proudly say that I had a small part in the most epic trade ever, so be sure to let me know if you do. πŸ˜€


Sunday, February 25, 2024

Riddle Update

Some updates from the trial (and my continuing deep dive in general):

This post is a follow-up to this post:

So read that first. πŸ‘†

I'm putting this in post form, rather than a comment, so I can have the option of cross-posting it on the public blog. The public post has so far gotten 5,000 views in 6 days, and I didn't even promote it. Did it bring in any new Speakeasy subscribers? Yes. [This post was first posted at the SE yesterday. It takes an extra day to reformat it for Blogger. A few minor updates were added since yesterday.]

First, let's start with one of the possible bombshells that I alluded to in the last post. There are a couple that are slightly related, so let me start with the backstory. (And don't worry, I'll get to yesterday's raucous testimony and the COPA high-fiving that followed in a minute, as this is all related. Things aren't as dire for Craig's side as the BTCmaxis are making them out to be.)

The trial was supposed to begin on 1/15/24, but on 12/15/23, during a pre-trial review, Judge Mellor agreed to allow the submission of new evidence from Craig's team, and delayed the trial to 2/5/24 to give the COPA team time to assess the new evidence.

The new evidence was 97 documents contained in two USB drives discovered in a drawer in Craig's house back in September. The drives contain LaTeX files, which is the open-source document preparation system that Craig says he used to draft the Bitcoin white paper back in 2008.

Because this new evidence was going to cause a delay and cost COPA money to have experts examine the new documents, the judge allowed the new evidence but ordered Craig to pay 800,000 pounds by 1/5/24. It's a deposit, in case he loses, which will then go to COPA to cover costs. Craig had already deposited 100,000 pounds for the trial, and 65,000 pounds to cover COPA's costs related to Craig's request for special treatment due to his autism.

So, the total Craig has had to deposit is 965,000 pounds, which is about $1.2M, and the last 800,000 pounds (about $1M) were due on 1/5/24. These are deposits he likely loses if he loses the case.

On that same day, 1/5/24, coincidentally (and as far as I've seen, no one has made this particular connection yet), an anonymous wallet withdrew that same amount, about $1.2M-worth of BTC from Binance, and transferred it to the Genesis wallet/address, which contains the very first 50 bitcoins mined by Satoshi. The actual transfer was 26.917 BTC.

There are a couple of unique things about that wallet, aside from it containing the first BTC ever created. The first is that those first 50 coins cannot be spent. They cannot be moved. But the amount in that wallet has grown over the years as Satoshi fanboys toss in miniscule amounts like coins in a fountain, or graffiti on a statue. It had actually grown to about 73 bitcoins by 1/5/24, so this new transfer was not only almost exactly what Craig Wright had to pay the court by the same date, but it also brought the total in the Genesis wallet up to almost exactly 100 BTC (99.7 BTC as I write).

It was a big mystery in the Bitcoin community when it happened. There are a bunch of articles if you google it, but I only heard about it after following the trial. None of the articles connect it to the trial, and the only tweets I've seen referencing it in relation to the trial did not make the connection between the value of the BTC on that day and the amount that Craig had to pay the court on that day. As far as I've seen, I'm the only one, and now you can see it too.

Article about Craig having to pay $1.2M to the court

Article about $1.2M-worth of bitcoin being transferred to the Genesis wallet

The many articles focus on three main possibilities. The first is that it was some kind of expensive promotional stunt related to the upcoming launch of the ETFs. The second is that it was a tribute to the 15th anniversary of that block, which was actually two days earlier. And the third is that it was a mistake, because that's a lot of money to just throw away.

This is something I've been trying to ascertain, whether or not that $1.2M-worth of BTC is now unspendable forever. I've read differing opinions about whether it's just the first block that's unspendable, even by Satoshi himself, or anything in that wallet/address. Maybe TSN knows the answer, or at least thinks he does. The article above seems to suggest that it might be possible.

The explanation for why the Genesis Block can't be spent is that "Satoshi did not add the genesis block's coinbase transactions to the global transaction database which is used by Bitcoin nodes," and it is unknown whether that was intentional, or just a mistake. So, to my simple mind, it seems like it's possible that coins that came from other "spendable" blocks may still be spendable, but only by Satoshi himself since he has the key to that address. On the other hand, it seems equally likely that they're unspendable once they go in and join the unspendable block. But if that's the case, then how come that address can still receive coins, just not transfer them?

Anyway, one of the tweets I found that connected this $1.2M Genesis transfer to the trial suggested that perhaps it was a gesture from the real Satoshi, saying that he's still alive, still around, and OK with Craig claiming his identity. Of course, the person who tweeted that believes, like I do, that Craig is Satoshi.

So, this is an interesting theory. After all, the real Satoshi has an estimated 20,000+ wallets, most containing 50 BTC, the reward for mining a block during the first four years when he did most of his mining. For his own privacy, he used a different address or wallet for each block he mined, making it difficult to track which ones are definitively his. Only a few from the very beginning are known for sure to be his, although "thousands of 2009, 2010 and 2011 Satoshi-era BTC have moved since Craig's Tulip Trust 9-year lock expired."

The point being, the real Satoshi is one of a very few people who could easily throw away 27 BTC just to make a point. Perhaps the point was that the $1.2M the court made him pay is like nothing to him. Another tweet suggested that it might have been a private demonstration of some kind that ended in Meta/Facebook dropping out of COPA right before the trial. I have a couple theories of my own.

My two theories are that it was a precursor to one of the possible bombshells that could rock this trial. I'm thinking about two scenarios in which Craig moves some coins after being ordered (or asked) to by the judge.

Think about this purely logically. When we get to the end of the trial, the judge gets to decide whether Craig wins or loses, meaning whether Craig is Satoshi or not. It's not going to convince TSN and most of the BTCmaxis either way, because they'll just say that the judge got it wrong if Craig wins. But ignoring that, say we get to the end of the trial, and the judge has to make this decision.

At that point, he's either going to already be convinced that Craig is Satoshi, or he's not. If he's convinced that Craig is Satoshi, then Craig wins. If he's not convinced, then there's a high probability that he'll give Craig one last chance to prove it, either through a public signing or a public coin transfer. Even if he is already convinced that Craig is Satoshi, he will likely do this anyway, for the same reason that Craig did the proof sessions with Gavin and Jon even though he had already convinced them with secret knowledge that only the real Satoshi would know, so that there's objective proof other than the judge's personal opinion. He'd want to do this so that he doesn't get pilloried by laser-eyed maxis for siding with Craig, like happens to everyone else who sides with Craig.

Here's where those 26.917 BTC might come into play. Whether they can be moved again, or they're trapped there forever, there's a plausible scenario here.

If they can be moved again, then let's say Craig had someone who knows he's Satoshi transfer them to that Genesis wallet. Craig will simply send them back to that person. This satisfies one of the main Bitcoin precepts, or concerns, at least in Craig's mind, about moving "original" coins from the few for-sure-known Satoshi wallets. He's not moving any original coins. He's moving coins that were only there for a couple of months.

How would it work? The coins came out of Binance, a cryptocurrency trading exchange, which essentially anonymized them. Binance KYC compliance would know who owns the account that withdrew them, but that's actually a feature of the plan, not a bug. Let's say it's Jon Matonis. Craig transfers the BTC from the Genesis wallet back to Matonis, who shows that he was the one who sent the coins through Binance to an anonymous wallet. Binance, if asked/forced, confirms it was Jon.

If they can't be moved again, if those 26.917 BTC are forever locked in Block 0, then this also satisfies that same main concern in Craig's mind about moving "original" coins from the few known Satoshi wallets. He simply transfers the same amount to an anonymous (but probably his) wallet, from another known Satoshi wallet that can do transfers. It's like printing 26.917 new BTC, which goes against his principles, but then he also shows proof that he destroyed 26.917 BTC by sending them to Block 0. So, on net, no new BTC were released from the earliest blocks.

To me, these possibilities make more sense than any of the others proposed by other people. Craig said that he would have done the coin transfer if the "proof pack" had been properly released. In his mind, perhaps, this trial is the proof pack, and his last and final chance to get it all out there.

Craig would have thought this through, and prepared to do the coin transfer. If the Tulip Trust is still involved, my two scenarios could have been worked out with the trustees, one of whom was identified in court as Denis Mayaka.

I realize that my scenarios seem needlessly complicated as he could simply move coins from one Satoshi wallet to another, but just imagine the delicious courtroom drama when he says, "Before this trial began, I asked so-n-so to send a mil to the Genesis Block…"

That's one possible bombshell. Another one that's related is those LaTeX files on the two USB drives submitted into evidence in December, is that he's saying he wrote the original white paper on LaTeX, and that there may be a fingerprint or watermark that'll prove he wrote it. I know the Bitcoiners think this was already debunked during yesterday's testimony, as there was no Satoshi watermark found by COPA, but it's still in play. This is another possible bombshell that could come out.

Note, also, the article that Will just posted on the same subject:
The Invisible Ink of LaTeX: Embedding Messages in Plain Sight


The Legacy of Steganography Steganography has traversed a long path from ancient times, evolving from physical subterfuges to intricate digital schemes. In today’s information age, where data is a currency, the ability to convey messages covertly is both an art and a science. We are about to explore an innovative digital application of this timeless art, using LaTeX.

LaTeX: A Primer LaTeX is more than a document preparation system; it’s a meticulous craft that allows for the creation of beautifully formatted text. Renowned for its use in academic and scientific documentation, LaTeX offers an unparalleled level of control over the layout, making it the ideal medium for our steganographic pursuits.


Conclusion: The Art of Concealment The interweaving of LaTeX and steganography is not just a modern repurposing of an ancient technique but a testament to the adaptability and enduring nature of the human desire for private communication. Through the seemingly mundane but incredibly versatile medium of LaTeX, we find that our everyday tools hold secret capacities. As we continue to explore and innovate, we are reminded that the most secure vaults may not be those of steel and stone, but those crafted from the spaces between our words.

OK, let's talk about yesterday's testimony. Yesterday was the day that COPA got to cross-examine Craig regarding the new evidence he submitted on 12/15/23, the LaTeX files from the USB drives. COPA had a couple of surprises up their sleeves, and this was gonna be a big GOTCHA day, so they packed their side of the courtroom with a bunch of laser-eyed maxis, one of whom was caught on the livestream picking his nose and eating the booger, but I digress.

The first surprise that Craig didn't know was coming, was that they had been able to download a keystroke log from his Overleaf account, which is an online LaTeX editor that Craig used to demonstrate to his attorneys the importance of these LaTeX files. This is how they were able to compile the animation that TSN posted on the last thread:

Matig wrote:

"A cybersecurity expert spends hours using an ONLINE EDITOR to forge a document for the court? I’ve skimmed some of his old unrelated technical writings, and they are credible. It’s hard to believe he could be so dumb as to not consider the risk that the online service would retain his edit history. But it’s even harder to make sense of his explanation to the court for doing this."

This did catch him off-guard, but I thought his explanation was quite reasonable. Here's how I put it all together. First, the discovery of old files on a couple of old hard drives at his home in September or October while preparing for trial makes sense, especially if he was looking for something in particular. I have stacks of old computers and hard drives, and I'm not even a computer guy.

He says he found some of the original LaTeX files from when he was working on the BTC wp (and other papers) in 2008. He would know the importance of these files in compiling the PDF that he published, but that might not be immediately apparent to his attorneys. All of this kind of stuff (i.e., documentary evidence) has to go through your lawyers. They have to understand it. You have to turn it over to them, and then they have to submit it to the court, and then it goes to the other side for review.

He said he had to use the online editor in order to demonstrate how it compiles the LaTeX file into a PDF, because it's the current version and older versions won't compile, and for other reasons as well. I don't know anything about LaTeX, just what I've learned from the trial, so don't shoot me if I get some of this wrong. But his explanation sounded quite innocent. He did a demonstration for his lawyers. He tried to put together what they needed. It sounds like it was a little rushed, and then they submitted it to the court less than a month later.

From what I gather, the real importance of the LaTeX file is not some fingerprint or watermark, although there might still be one, it's how hard (or impossible?) it would be to recreate a new LaTeX file from the original PDF, one which would compile into a perfect match of the original PDF. I think that's what he was demonstrating to the attorneys.

Later, he told COPA and their attorneys how to properly verify the LaTeX files, but they didn't do it. Instead, they ran with this forgery narrative and ambushed him in the courtroom with the animation.

At the very end of the day, they focused in on a specific image detail in the "forgery" that they said had to have been forged in a program called Aspose, and inserted into the LaTeX file from Aspose. It could only have come from Aspose because the level of detail exactly matched Aspose. Craig said he never used Aspose, and furthermore, that edit wasn't in the Overleaf logs!

COPA: These changes show you committing the act of forgery. CSW: No

COPA: the animation shows it in progress. CSW: No, and you are claiming that the edit can exist without the record of edit. It obviously wasn't done in my Overleaf. It shows them being loaded. While I had my computer being screenshotted by a third party...

COPA: You thought you could escape the forgery by withholding the metadata. CSW: I sent Overleaf right away

COPA: But Overleaf showed you forging key by key! CSW: And that doesn't show anything about aspose, so the forging must have been done on another machine!

COPA: Your files are a forgery. CSW: they could be, but not by me.

Here's a good explanation of what Craig was doing in the demonstration:

The Art of Watermarking the Bitcoin Whitepaper

Craig Wright (CSW) demonstrates creating a unique watermark in a LaTeX Bitcoin whitepaper document, arguing it's proof of authorship due to its complexity and the difficulty in replication, highlighting his claim to being the creator of Bitcoin.

Purpose of Adjustments: CSW explains that his adjustments to spacing were intended to demonstrate the creation of a watermark, not to forge the document. This was part of showing the complexity involved in replicating the exact formatting of the original document without knowing the original LaTeX settings. He states, "To show how they work," highlighting his intent to demonstrate the watermark's creation process.

Watermark Creation: Wright's demonstration aimed at showing how the original LaTeX file was set up to create the whitepaper, including a unique watermark. This involved manipulating variables controlling aspects like base spacing and the stretch and shrink limits. Wright emphasizes, "Yes, but this isn't something you can just guess. I'm demonstrating that with 4 variables, you can't fake it," underlining the complexity of this proces.

Documentation and Transparency: Wright mentions documenting the process through screenshots and having his solicitors present during the demonstration, indicating efforts to transparently show how the watermark was created. He notes, "Screenshots and such. Shoosmiths were at my house," suggesting a meticulous approach to proving the watermark's existence and his original creation of the document

Complexity in Replication: The conversation highlights the complexity of the LaTeX formatting, where changing one variable impacts others, making the document's unique formatting challenging to fake. Wright asserts, "Yes, I was showing how difficult it would be to fake," emphasizing the intricate details that serve as a watermark and underscore his authorship claim.

Three-Body Problem Analogy: Wright compares the difficulty of guessing the correct settings to the three-body problem in physics, a complex problem where predicting the motion of three celestial bodies interacting through gravity is notoriously difficult. He explains, "You'll notice 3 values. I was showing the 3 body problem. You can't guess a value and hope it matches," using this analogy to illustrate the complexity of accurately replicating the watermark without knowing the original variable settings.

This conversation underscores Craig Wright's attempt to demonstrate the technical complexities behind the creation of the Bitcoin whitepaper as evidence of his authorship. The emphasis on the unique watermark created through LaTeX formatting variables and the analogy to the three-body problem serve as a strong argument in his claim to being the creator of Bitcoin.

Arguing that the watermark demonstration was a deception misses the point entirely. The watermark serves as a strong piece of evidence precisely because it cannot be easily replicated or guessed. It's akin to a digital signature that uniquely identifies the creator. The complexity of the variables involved and the analogy to the three-body problem highlight the near impossibility of duplicating such a watermark without intimate knowledge of the original document's creation. Therefore, the watermark is not a trick but a testament to the author's originality and technical skill, reinforcing Craig Wright's claim to authorship in a way that simple replication of text cannot.

Interestingly, the demonstration of the unique watermark did not originate from Craig Wright but from his opponents. This raises questions about how they accessed the data.

Their misinterpretation of the demonstration's intent, aiming to use it against Wright, ironically undermined their position, resulting in an unintended self-defeat

Now, this is getting a little more into the weeds than I wanted to go in this post, but Craig mentions Christen Ager-Hanssen (CAH) as someone who could and would have sabotaged his evidence. Christen Ager-Hanssen is a Norwegian billionaire venture capitalist, who was CEO of nChain until Stefan Matthews fired him last September. He hates Craig, and tried to force Stefan Matthews not to testify in this trial. You can read Stefan Matthews' testimony (day 1 and day 2) to get the full story, but Christen Ager-Hanssen definitely has the motive and means to sabotage those files. There's so much money involved that there's a lot of intrigue surrounding this trial, and it's not coming from autistic Craig and the BSV bunch.

Moving on, here's something interesting I came across. I think Midnight Gardner might recognize this guy (the video is cued up to the appropriate point, it's only a minute or so):

Here's more:

Here is that interview, from 5/5/16:

Craig Steven Wright, who over the past days claimed to be the inventor of Bitcoin, has been unable to publicly prove control over any of the keys that (only) Satoshi Nakamoto should possess. While his initial blog post deceptively included a Satoshi Nakamoto signature that was always publicly available, today he announced he will not move any of “Satoshi's bitcoins.”

Yet four notable men in the Bitcoin and cryptocurrency space still believe Wright is Satoshi Nakamoto, or leader of a team called “Satoshi Nakamoto” that also included the now-deceased Dave Kleiman. Bitcoin’s former lead developer Gavin Andresen and former Bitcoin Foundation director Jon Matonis met Wright over the past weeks, and – among other things – believe to have seen cryptographic proof. Digital currency veteran and R3-architect Ian Grigg has been publicly backing Wright's claim, too.

The fourth source maintaining that Wright is the man behind the alias Satoshi Nakamoto is New Liberty Dollar issuer Joseph VaughnPerling. VaughnPerling says he met Wright at a conference in Amsterdam three years before publication of the Bitcoin white paper – and that Wright introduced himself as Satoshi Nakamoto at that time.

This is not a new story: VaughnPerling has been saying he met Satoshi Nakamoto for years.

More recently, VaughnPerling appeared on the Bitcoin Core Slack channel, where he predicted Satoshi Nakamoto would reveal himself around this time.

To learn more, I reached out to VaughnPerling via the Bitcoin Core Slack channel myself. Late at night, at 2 a.m. local time, VaughnPerling responded. He seemed slightly pressed for time, and it had been a long day for me, so we only chatted for about 30 minutes.

To avoid too much interpretation from my end, I have decided to publish our full conversation. Bitcoin Magazine has not been able to find any other sources to confirm the information provided by VaughnPerling such as the message from the trustee of the Tulip Trust.

Joseph VaughnPerling: You had some questions?

Aaron van Wirdum: The main question I have right now is: If Wright is Satoshi ... why would he publish fake proof? Any idea?

JVP: I have some very good ideas. If I were in Dr. Wright's position, I would do exactly as he has done.

I also have a message for Dr. Wright from the trustee of the Tulip trust that is controlling the coins that he wants to move. Not yet announced:

The Tulip Trading Trust trustee, appointed by Dave Kleiman as of Oct 12nd 2012. It has been rumored that Craig Wright will need to access Tulip Trading Trust assets. Trustee acts in the interest of the beneficiary alone and must defend against undue influence by others. In order to authorize movements of trust assets the beneficiary must come forward and make a direct request of the trustee our way NOT via 3rd party nor any intermediaries. Any coin movement affecting the trust asset without prior authorization will be considered a trust violation and invalid irrespective of any claim of constructive bailment. The Trust alone has control over its assets. Tampering or manipulating with trust assets by anyone (including the beneficiary) might have material legal and tax implications. Beneficiaries are invited to a conference call 12:00 UTC Friday to discuss interests. Principals only.”

AVW: Can you help me out here? Who's who in this message? Is Wright a beneficiary?

JVP: It is not my place to speculate on the transactions and assets of others.

AVW: So you don't know?

JVP: What I know and when I know it is not something I am interested in sharing. At least as regards the matter of the finances of others. It would show me to be a nosy one. And that much is already apparent to anyone looking at me. My nose is hard to miss.

AVW: As I interpret that message, Dave Kleiman locked up Satoshi's holdings with Tulip Trust. In order to move Satoshi’s coins, like Wright said he would, he needs access. Which he may or may not get ...

JVP: Close, but it shows that you are not entirely familiar with how a trust works.

AVW: That is correct.

JVP: Did you have other questions?

AVW: Why do you have this message?

JVP: He will know why.

AVW: Why are you sharing it with me?

JVP: It will also be shared with some selected cryptographers.

AVW: But I can publish it?

JVP: Kind of you to ask. Yes.

AVW: So you're really sharing it with the world then. Which brings us back to "why"...

JVP: I would like for Craig Wright to have his privacy. He has already done more for us than we can repay, but it is not just this. I would like him to be able to do what he wants to do, without interference. We would all be better off when that occurs.

AVW: How does sharing that message help?

JVP: He is following a wrong path, because he must. He is doing it the least-wrong way possible. He is on Meifumando. It is as it has to be.

AVW: What is the wrong path? And what is the right path?

JVP: The world can learn much from what he has done and how. He is showing what cryptography does and does not do. It is a lesson that the world needs to learn before mass adoption can occur.

AVW: Mass adoption of Bitcoin?

JVP: The world was not ready for Bitcoin when it appeared. When the world learns these simple lessons, it will be more ready.

AVW: Why is Bitcoin not ready for mass adoption?

JVP: People do not understand what cryptography does and does not do. People do not understand pseudonymous. Having a key means you have a key. It does not mean you had it previously, or that you will have it in the future.

AVW: Right ... So?

JVP: He is forced on a stage, so he provides a masterful lesson that many who call themselves cryptographers seem to have forgotten.

AVW: In what way is he forced?

JVP: He said it himself, the decision to appear was made by others. Did you not even watch his video on BBC?

AVW: Of course I did.

JVP: Watch it again. You missed a lot.

AVW: But he didn't say in what way he was forced, did he? Or how, or why ...

JVP: I will say this much. If I were in his situation, I would have done as he did, though probably not even as well as he did.

AVW: Wright's Twitter account bio says Ian Grigg and yourself maintain it. Is that true?

JVP: Dr. Wright deleted his Twitter account for his own protection. A friend of his picked up the account as it came available to preserve it for him.

AVW: So Ian and yourself are currently controlling that Twitter account?

JVP: There may be others involved as well, but we are the ones that are taking the bullets.

AVW: How well do you actually know Wright? You speak like you know him very well, but you just met him at a conference once, didn't you?

JVP: I met him at a conference in 2005, he wore the moniker. We discussed what became Bitcoin at great length. He knew all there was to know about Bitcoin in 2005, and he shared it with me. I did not learn his government-registered name until much later.

AVW: So you did get to know him later on?

JVP: That's a story for another time.

AVW: Did you know Dave Kleiman as well?

JVP: Dave Kleiman was an exceptional man. If you want to know more about Dave, you should talk to the SANS folks.

One of the top SANS people is also having a conference in Las Vegas in September, where the Trustee of the Tulip Trust is expected to appear.

AVW: Expected to appear?

JVP: Very high probability.

Not all details are decided, but I have heard that they may be even auctioning consultations with her.

AVW: You realize all of this is a really weird story, right?

JVP: Yes, and you have seen only the snowdrift on the tip of the iceberg. The level of weird is off the scale.

AVW: Do you know the full story?

JVP: I doubt even Craig knows the full story, but I could fill about 20 books.

AVW: No offense, but: Why should I trust any of this? Why should I trust anything you say?

JVP: Do your own research. Keep on your quest for knowledge. When you find someone who can teach you, listen carefully. When you find someone that can learn from you, be kind.

AVW: You're skilled at avoiding questions through what sounds like ancient wisdoms.

JVP: You are a reporter, the ancient wisdom is multiple sources, so ... do your own research …

Author’s note: The transcript was slightly edited for readability. Typos were fixed, punctuation improved (VaughnPerling uses double-spaces), the order of some questions was changed, and seemingly irrelevant text (like our chit-chat introductory talk) was removed. I tried to stay as close as possible to the original text and context, however.

Image via YouTube

Another interesting development is that, just this past Thursday, a guy named Martti Malmi released a treasure trove of 260 of his private emails with Satoshi from 2009 through 2011 when Satoshi bowed out.

He writes:

This is the correspondence between myself (Martti Malmi, AKA Sirius) and Satoshi Nakamoto, the creator of Bitcoin.

I did not feel comfortable sharing private correspondence earlier, but decided to do so for an important trial in the UK in 2024 where I was a witness. Also, a long time has passed now since the emails were sent.

The archive is incomplete and contains only emails from my address @cc.hut.fi. My university email addresses changed to @aalto.fi in early 2011, and I don't have backups of those emails.

There are some passwords and a street address mentioned in the emails, but those are no longer valid or relevant.

It has only been less than 48 hours since they came out, but already a new narrative is circulating in the Bitcoin community, dissuading people from reading the emails. It goes like this:

That's because, some of the emails written by the real Satoshi sound an awful lot like Craig:

This is basically where it stands today. The lasereyed maxis are taking victory laps this weekend, high-fiving, saying it's over, he's done, Creg is cooked, but the trial is really only half over.

To be clear, I'm not predicting the outcome of the trial. Craig could lose, but unless something changes, I'll still be sure it's him. The circumstantial evidence that it's him is simply overwhelming. I think some of the COPA witnesses know it's him, and they're lying because there's so much money at stake. Plus, they just don't like him.

Martti Malmi, the guy who published his private emails with Satoshi, is the guy who moved the Bitcoin forum from Bitcoin.org to Bitcointalk.org, and didn't even invite Satoshi. Satoshi invented Bitcoin, but these early developers had their own ideas about which way it should go, and that's basically where it is today. They're saying that even Satoshi didn't understand Bitcoin properly, even in those very early days as evidenced in the emails. How funny is that?

And just to be even more clear, I'm not suddenly a fan of Bitcoin, BSV, Satoshi or Craig Wright. I started my blog two months before Satoshi released the Bitcoin white paper, and I'm still on the same track that I was then. Bitcoin, on the other hand, has zigged and zagged, jumped the tracks (and the shark) many times, and the earliest participants (who are mostly all a little younger than me) are off doing their own things. My view of BTC hasn't changed since 2011: It's a tulip-style trading bubble. Notably, I wrote my first Bitcoin post a couple of months after Satoshi abandoned the developers to work on something else.

Now I'm learning about how nChain is running over a million transactions a second, which is apparently really fast:

Here's the very last thing Craig said on the stand yesterday:

COPA: Your claim to be Satoshi is a fraud. CSW: No. I have proved bitcoin can scale beyond Oracle and any Silicon Valley system. Nobody can do a million tx/second. Customers don't care if I'm Satoshi. they care about the science and the tech.

One thing I don't think the Bitcoiners understand is that BSV is not trying to do the number-go-up thing. It's not something you save. It's not a speculative asset.

Here, when he says "Bitcoin is fine," he's talking about BSV, Bitcoin Satoshi Vision, which BSVers call the real Bitcoin:

You see, this isn't me getting into crypto or anything like that. But taking this deep dive into the trial, as an outsider with kind of a unique perspective, has opened my eyes to another angle on it. It was never intended to be what it became, at least not by the guy who started it, even by 2011 when it popped up on my radar.

I find myself agreeing with these BSVers that BTC is doomed to fail. I have thought that since 2011, but they only started thinking that in 2017. Satoshi apparently thought that in 2011. Today you've got all these bitcoin whales living in 20,000 square foot mansions with nothing to do but buy another Lambo. That's not success. That's clearly the top of the bubble, and it's not sustainable. This thing is doomed to fail.

With BSV, nCrypt, Teranode, this whole idea of big blocks, millions of transactions per second, with transaction fees of a couple of cents, all on the main blockchain, I can finally see some merit in the idea. Plus, it's not something you buy for the moonshot. It's not trying to bubble like BTC. If it ends up working, it'll be "backed by cash" as Satoshi wrote. It'll be fixed to the dollar, or whatever currency is backing it, by the central bank. It'll simply be a new component of the monetary base, along with physical cash and commercial bank reserves, as I wrote in this post, only it will make digital micropayments simple enough for boomers, and practically free.

And I don't think the idea that CBDCs might use this software nChain is developing is so outlandish. No, they're not going to give Calvin Ayer control of their CBDC network, but they might buy nChain's system, not because of patents, but because it's turnkey and it works. That's what governments and bureaucracies do. They take the best from the private sector and use it. Governments and bureaucracies are, by nature, slow and stupid. Here's a flashback from a 2009 post on my blog:

I think I'll end this here, because it's getting late, and this is still a developing story. Don't let the maxi-technobabble fool you. This is far from over. The maxi narrative of Craig as an epic forger has evolved into a tight, cohesive belief system over the years, complete with an explanation for anything and everything. So has the BTC small-blocker number-go-up narrative, but I watched it grow all the way from its first seeds in 2011, and believe me, they made it up as they went along.