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Balaji Profile picture
@balajis
Mar 10, 2022 • 9 tweets • 5 min read • Read on X
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No, gold was defeated by the state. FDR seized the gold of US citizens with Executive Order 6102.
theconversation.com/how-the-us-gov… Image
This was just a particularly explicit version of how centralized states expropriated individuals over the 20th century to fund their operations.

Gold was seized at $20.67, then the dollar was devalued so it was $35 per ounce. The state booked the profit.
federalreservehistory.org/essays/gold-re… Image
Even Krugman admits it: fiat currency is backed by men with guns.
Let's go through some of the conceptual issues here.

"It was too inflexible to allow sufficient policy to be done"

In other words, gold once limited the power of centralized states to seize the assets of citizens for their own purposes, like huge wars.
"This monograph presents a survey of the crucial link between state power and finance from the ancient era through to the present day. Cicero once said that the true sinew of war was endless streams of money."
press.armywarcollege.edu/monographs/455/ Image
"Investment in accordance to productive capacity"

Indeed, you want to invest in projects with real cash flows. But you also don't want your money debased via inflation. So the measure of any investment is whether it can outperform simply holding BTC.
For years, retail and professional investors alike have benchmarked their returns in BTC terms. That's why coinmarketcap.com makes charts like this easy. You can see whether the no-op of simply holding BTC outcompetes an investment. Image
Additionally, you can quantify the daily fees paid, which can be plugged into a DCF model just like cash flows, even though these are chains rather than businesses.

This is a different sense in which BTC and other coins actually are "productive assets".
cryptofees.info Image
Technologies like mass production & mass media enabled the growth of centralized states till ~1950. The transistor, PC, internet, smartphone, and BTC are now *on balance* decentralizing that power...albeit not without an attempted Counter-Decentralization.
sotonye.substack.com/p/if-einstein-…

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More from @balajis

Balaji Profile picture
Oct 14
The AI flippening. Image
Crypto has also decentralized to Asia. Image
About 55% of unicorns are still in the US, but the trendline there is also towards decentralization. Image
Read 4 tweets
Balaji Profile picture
Oct 8
There's dark talent around the world, from the Midwest to the Middle East. Backing this talent is the right thing to do morally and the smart thing to do economically.
To be clear: I'm not talking about sending more tech talent to the US. Instead, I'm talking about backing dark talent around the world.

That includes the many white kids from places like the Midwest who've been unfairly quota'd out of Harvard. But it also includes those outside America whose societies were ravaged by war, socialism, or communism...and who are just now starting to become productive again.

The goal is global equality of opportunity. The Internet actually now provides the basis for uniform rule-of-law via rule-of-code, starting with Bitcoin and smart contracts. We just need to execute from here.
Yes. That's what the blockchain is: everyone worldwide gets access to their ideal monetary policy, payments, smart contracts, and entity formation. Enforced by incorruptible & transparent computer-based judges. And opted into on a purely voluntary basis.
Read 4 tweets
Balaji Profile picture
Sep 17
Prime Minister Modi comprehensively defeated the far left in India.

It can be done.
Naxalites drew their inspiration from Maoism and terrorized India for decades. Now these communists have formally surrendered.

britannica.com/topic/Naxalite x.com/thelegatein/st…Image
Fifteen years ago the far left still controlled almost one third of India.

The Modi government fixed the issue by using force against actual terrorists while addressing the underlying discontent with economic development. It worked.
indiatoday.in/amp/india-toda… x.com/iyervval/statu…Image
Read 8 tweets
Balaji Profile picture
Sep 8
Both America and China were invested in the illusion that China wasn't already the world's strongest economy.

Psychologically, it suited the incumbent to appear strong. So America downplayed China's numbers.

Strategically, it suited the disruptor to appear weak. So China also sandbagged its own numbers.

But the illusion is becoming harder to maintain.Image
In retrospect, all the China cope over the last decade or so was really just the stealth on the Chinese stealth bomber.

Hide your strength and bide your time was Deng's strategy. Amazingly, denying China's strength somehow also became America's strategy.

For example, all the cope on China's demographics somehow being uniquely bad...when they have 1.4B+ people that crush every international science competition with minimal drug addiction, crime, or fatherlessness...and when their demographic problems have obvious robotic solutions.

Or, for another example, how MAGA sought to mimic China's manufacturing buildout and industrial policy without deeply understanding China's strengths in this area, which is like competing with Google by setting up a website. Vague references to 1945 substituted for understanding the year 2025.

One consequence of the cope is that China knows far more about America's strengths than vice versa. Surprisingly few Americans interested in re-industrialization have ever set foot in Shenzhen. Those who have, like @Molson_Hart, understand what modern China actually is.

Anyway, what @DoggyDog1208 calls the "skull chart" is the same phenomenon @yishan and I commented on months ago. Once China truly enters a vertical, like electric cars or solar, their pace of ascent[1] is so rapid that incumbents often don't even have time to react.

Now apply this at country level. China has flipped America so quickly on so many axes[2], particularly military ones like hypersonics or military-adjacent ones like power, that it can no longer be contained.

A major contributing factor was the dollar illusion. All that money printing made America think it was richer than China. And China was happy to let America persist in the illusion. But an illusion it was. Yet another way in which Keynesianism becomes the epitaph of empire.

[1]: asiatimes.com/2025/07/thucyd…
[2]: x.com/balajis/status…Image
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Well, it's not the idea, it's the execution.

China can just sit back and let the world be its Xerox PARC. And then become a speedy second mover on anything that's working.

So you need innovations China genuinely can't copy.
One of them is Bitcoin.
Read 7 tweets
Balaji Profile picture
Sep 1
The dollar is losing reserve currency status. It’s down to 42% of global reserves, and gold is rapidly rising. Image
Digital gold is becoming the reserve currency of the individual.

Gold is returning as the reserve currency of the state.

Original post below.
Recall the Fed admitted that a “small number” of countries were switching to gold.

But that small number actually included Russia, India, and China: the RIC of BRICS.
Read 6 tweets
Balaji Profile picture
Aug 18
On many graphs of the physical world, China is in first place by a wide margin.

But if you look more closely, India is a distant but real runner up. Image
Image
The same pattern holds in nuclear.
China is #1 in reactors under construction.
But India is in second place. Image
Electricity generation is similar.

China’s recent increase is unparalleled in history. But India is increasing quickly, and will flip the EU soon. Image
Read 7 tweets

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