Peter Thiel on the American Political System – “Not a Democracy or Constitutional Republic”

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The obvious conclusion that the U.S. is neither a democracy nor a constitutional republic has been a key topic of conversation here at Liberty Blitzkrieg over the past several years. One of the most powerful representations of this unfortunate fact came from an academic study highlighted last year: New Report from Princeton and Northwestern Proves It: The U.S. is an Oligarchy.

A couple of days ago, Peter Thiel sat down with Tyler Cower at George Mason University’s Mercatus center for a chat about all sorts of interesting things. The Washington Post picked up on some of his thoughts regarding the American political system, which I think deserve some additional commentary.

On the one hand, he accurately identifies the U.S. as nothing resembling either a democracy or a constitutional republic. He then goes on to point out that the system we have is one in which the power is increasingly concentrated in undemocratic, “technocratic” agencies. Where I think he falls way short is with a failure to ask what interests are driving the decisions of these undemocratic entities. Any unbiased observer can clearly see that it is oligarchs driving the oligarchy, as opposed to independent thinking bureaucratic technocrats driving a technocracy. I have published countless articles proving this to be the case. Naturally, a billionaire might have a harder time recognizing this.

Fortunately, the writer of the Washington Post article picked up on his oversight. Here are some excerpts:

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The Ambitious Plan to Break California into 6 States – A Model for the Future?

Screen Shot 2014-07-21 at 1.17.06 PMThe more I’ve thought about potential solutions to the gigantic mess we have found ourselves in as a species, the more I have come to believe we need to break apart into a vast multitude of city-states. The revolutionary concept of America in the first place was this idea of “self-governance,” something we do not posses an iota of in this day and age. As was noted recently in an academic paper published by Princeton and Northwestern, these United States have mutated into nothing short of an oligarchy. In fact, the study demonstrated that the will of the people has essentially zero impact on legislation whatsoever.

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Guest Post: Why is the Bitcoin Price So Weak?

It’s been a wild 2014 so far for Bitcoin. On the one hand, there has been some very bad news in the space. We’ve had the Mt. Gox disaster and the potential overhang those stolen coins have on the market, as well as rumors of an effective Chinese ban (we still don’t have confirmation of anything).

On the other hand, there has been a lot positive news as well. We have seen some of the most brilliant venture capitalists in the world continue to put a great deal of time and money into crypto-currency related enterprises, as well as continued merchant adoption, with the biggest news being Overstock.

One of the leaders in the Bitcoin space, helping people spend their BTC at a wide range of traditional stores ranging from Target and Whole Foods Market, to the recent addition of Wal Mart is Gyft, led by its CEO Vinny Lingham. I’ve known for some time now how intelligent and entrepreneurial Vinny is, but as of today I have also discovered he is a strong writer.

With his permission I am republishing his excellent piece, Finding Equilibrium: Searching for the true value of a Bitcoin, below.

I agree with pretty much all of Vinny’s main points. I have been on record saying the recent surge and plunge is eerily similar to the 2013 surge and plunge. If that pattern repeats, we should see the next big move this summer. Vinny thinks the price may flatline for longer than that before moving strongly again.

Enjoy.

Finding Equilibrium: Searching for the true value of a Bitcoin.
by Vinny Lingham

Bitcoin has a number of headwinds which is keeping the price in check. I’m expecting it to stabilize around the $400 mark for at least the next quarter (although predictions in the Bitcoin space are very hard to do past a couple of weeks).


As Bitcoin stabilizes below $500 for the first time since it’s eye-popping run to over $1,000 in November 2013, many crypto pundits are scratching their heads and trying to make sense of the current weakness — especially given the excitement & innovation that we are seeing within the global Bitcoin community. Venture capital has also been pouring into Bitcoin startups at a rabid pace (north of $100m so far this past year). However, over the past couple of days, I’ve had numerous friends contact me asking the same question : “What’s happening with Bitcoin?”.

Bitcoin is currently trying to finding an equilibrium point — at least at the current volume levels — given all the recent disruptions to the ecosystem (including the recent MtGox collapse). Equilibrium would be defined for me as the point of stability in price where there is symetric volume and consistent growth on a daily basis between buyers and sellers (utopian, but right now there is asymmetric growth which is not being quantified — so traders are having a problem predicting where it would go).

History shows that it needs to find a very stable price point for a few months before it can really retest any previous highs. External factors like Russia, Ukraine, China, etc will contribute to Bitcoin volatility and changes in the supply/demand curve globally.

I spent some time at the CoinSummit conference in San Francisco last week and my panel discussion, “Bitcoin transactions — what are the barriers for merchant and consumer adoption?” was well received by the community.

Its very clear that Bitcoin has amazing potential but the fact remains that we are still in the very early stages of it’s evolution — which many have likened to the Internet in 1993. Mainstream consumer adoption is just not there yet. We’re waiting for the “Netscape moment” for Bitcoin.

I also don’t believe Bitcoin is suitable as currency — I think it’s a commodity that can be traded for goods and services. It may become a currency in time, but it just isn’t one right now. It’s a scarce, digital commodity — and the trading that takes place on exchanges really reflects the market sentiment around the value of this digital commodity.

In the not too distant future, entrepreneurs & technologists will use the actual Bitcoins themselves in new and interesting ways (think smart contracts, etc.) —how many will be ultimately needed is unknown, and that’s what creates the imbalance in price. Right now it’s all speculation as to what that future value of a Bitcoin will equate to. This is what makes the Blockchain far more interesting than the actual Bitcoin — but I’ll leave that for a future post.

I have some alternative views (i.e. not stuff the mainstream press totally gets), as to why Bitcoin is trading below $500 right now, but I want to point out that I am a Bitcoin bull for the long term. I even predicted at the Silicon Valley Bitcoin Conference in May 2013, it would reach over $1,000 in 2013 when it was trading at $100 to audible sniggers and laughs from a very Bitcoin friendly audience.

That said, conversely, here are the key reasons why I think the Bitcoin price may not organically reach $1,000 again this year, without an external event shifting the supply/demand curve for Bitcoin. It is difficult to predict anything further out than a single quarter in the Bitcoin world, so instead of making bold predictions I would rather focus on highlighting some issues that are suppressing the Bitcoin right now.

TechCrunch published a story yesterday about the recent IRS rulings around Bitcoin — which classifies it as an asset, not a currency (which effectively makes transactions using it taxable). To be frank, anyone who thought that Bitcoin would not be subject to taxes in some form is living in a dream world.

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Noam Chomsky on the Classification System: “It’s to Protect the State from the Citizens”

I’ve spent quite a lot of time studying declassified internal documents, and written a lot about them. In fact, anybody who’s worked through the declassified record can see very clearly the reason for classification is very rarely to protect the state or the society from enemies.  Most of the time it’s to protect the state … Read more