Taken from ‘Economic Facts and Fallacies’ by @ThomasSowell, the Open-Ended Fallacy lays out the dangers of causes, movements and campaigns whose advocates disregard the limited nature of time and resources or the reality of trade-offs.
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1/ “Who could be against health, safety, or open space?
But each of these things is open-ended, while resources are not only limited but have alternative uses which are also valuable.”
2/ “No matter how much is done to promote health, more could be done. No matter how safe things have been made, they could be made safer. And no matter how much open space there is, there could be still more.”
3/ “there are advocates, movements, laws, and policies promoting an open-ended commitment to more of each of these things, without any indication of a limit, or any principle by which a limit might be set, much less any consideration of alternative uses of the resources..”
4/ “Health is certainly something desirable and most people are happy to see billions of dollars devoted to cancer research. But would anyone want to devote half the national income to wiping out skin rashes?”
5/ “Crime control is certainly desirable but would anyone want to devote half the national income to wiping out the last vestige of shoplifting?”
6/ “While no one would advocate these particular trade-offs, what open-ended demands for open space, crime control, better health or cleaner air and water do advocate leaves out the very concept of trade-offs.”
7/ “That is what makes such demands open-ended, both as regards the amounts of money required and often also the amounts of restrictions on people’s freedom required to enforce these demands.”
8/ “Open-ended demands are a mandate for ever-expanding government bureaucracies with ever-expanding budgets and powers. Unlimited extrapolations constitute a special variation on the open-ended fallacy.”
9/ “Much bitter opposition to the building of homes, highways, or even water and sewage systems is based on the belief that these will just attract more people, more traffic and more urbanization..”
10/ “not only is there no unlimited supply of people, every person who moves from one place to another reduces the crowding in the place left while increasing crowding in the place that is the destination—with no net change in the amount of crowding in the society as a whole.”
11/ “Many beliefs which collapse under scrutiny may nevertheless persist indefinitely when they are not scrutinized, and especially when skilled advocates are able to perpetuate those beliefs by forestalling scrutiny through appeals to emotions or interests.”
END/ “Some popular fallacies of today are centuries old and were refuted centuries ago, even if they are repackaged in up-to-date rhetoric to suit current times.”
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Selected quotes from Part II of @FossGregfoss’s salient paper:
‘Why Every Fixed-Income Investor Needs to Consider Bitcoin as Portfolio Insurance’
0/ “Bitcoin is the best asymmetric trade I have seen in my 32yrs of trading.”
1/ “Owning Bitcoin does not increase portfolio risk, it reduces it. You are actually taking MORE risk by not owning bitcoin, than you are if you have an allocation.
It is imperative that all investors understand this, and I hope to lay out the arguments why..”
2/ “The GFC just transferred excess leverage in the financial system to the balance sheet of the governments.
Perhaps there was no choice but there is no question that in the ensuing decade, we had the chance to pay down the debts that we had pulled forward. We did not do that.”
People create new ways of doing things. This alters incentives and shifts behaviours. Creative destruction ensues and opportunity creates new players, rules & systems.
Restrict innovation and a jurisdiction will fall behind.
There are three key markers of a disruptive innovation: 1. Born from a catalyst 2. Perceived as a toy/novelty 3. FUD from incumbents/concerned citizens
Let’s look at how Bitcoin has tracked these over time.
Satoshi’s message in the genesis block points us to the GFC and subsequent bailout of financial institutions.
The architects of the crisis would be protected from the full consequences of their actions.
“Lightning is a new set of rules. A new protocol on top of the Bitcoin network...giving this natively-digital bearer-instrument cash finality.
The first killer app of the Lightning Network is clear as day- it's making borderless payments free and instant.” @JackMallers
“The existing monetary networks- you’ve got ACH + Visa, ACH + Square, ACH + PayPal. Bifurcated networks that exist independent from each other.
What @ln_strike is trying to achieve is ACH + the Bitcoin network- a global open monetary network.”
“We’ve set up lightning + Bitcoin infrastructure all over the world. There’s strike infrastructure that represents Central America, Ireland, UK, Australia, Canada. We’ve got all these nodes in this monetary network set up, acting on behalf of users in that geographical location.”
Speaking to @RealVision, Saylor laid out his concerns with the current rate of monetary expansion:
"I came to the horrifying conclusion that I’m sitting on a $500M ice cube that’s melting. It’s melting at 6% in a good year. Then you realize this year it’s melting at 25%."
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In an interview with @KeithMcCullogh, Saylor cautions against financial models that fail to account for the adoption of new networks:
“What happens if 10 billionaires decide to buy $1B of bitcoin each and announce it…all of your models are destroyed, completely devastated.“
1/ “When a nation's money is no longer a source of security, and when inflation has become the concern of an entire people, it is natural to turn to…other societies who have already undergone this most tragic and upsetting of human experiences.”
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2/ “The agony of inflation, however prolonged, is perhaps somewhat similar to acute pain — totally absorbing, demanding complete attention while it lasts; forgotten or ignorable when it has gone..”
3/ “In the eight years since 1913, the price of rye bread had risen by 13 times; of beef by 17. Sugar, milk, pork and even potatoes had risen between 23 and 28 times; butter had gone up by 33 times.
These were only the official prices — real prices were often a third higher”