Don’t sit and wait for the crack

It might be a waste of time and energy

Watching how speed builds up so quickly in so many areas in clown world, in everything from money printing to media dumbing down the populace, reminds me of a bull whip in action. However, I don’t think we will get to the moment when the whip cracks, and here’s why.

In order to understand the world, including ourselves, political and social developments, we are culturally compelled to try to use analogies from the natural sciences. Hence my thinking of the bullwhip. The reason why we reflect in this way, is partly because we feel an urge to simplify, and partly because of influence from so-called “experts” in the field of social sciences. Ragnar Frisch, John M. Keynes and Irving Fisher where some of the key proponents for the use of methods borrowed from the natural sciences, and they unfortunately still influence the way of thinking within academia and the rest of society.

The reason why it makes no sense to use methods from the natural sciences on social problems is that human action is incredibly complex and unpredictable. This magnifies when we interact and when we take the dynamics of time into consideration. Coincidence and the whims of human beings make a decisive contribution to how events unfold, something which the following example demonstrates.

The Viking King Harald Hardråde didn’t control the Norwegians before he managed to kill Einar Tambarskjelve in a cowardly plot in 1050. He immediately set up mints, introduced death penalty for those who didn’t accept the mints’ coins, and started debasing the coins. In 16 years, he debased the coins by approximately 2/3, and by doing this he defrauded my ancestors on a gigantic scale. Hardråde earned a ton of money on hisinflation scheme and became incredibly powerful.

The success went to his head, and in 1066 he took with him 7-9000 soldiers in 200 long boats and sailed west. His aim was to conquer England. A combination of strategic errors and bad luck sealed their destiny, as the English King Harold Godwinson caught them by surprise, and slaughtered Hardråde and 2/3 of his men in the Battle of Stamford Bridge. Godwinson suffered great losses too. William, the Duke of Normandy, invaded England less than three weeks later, and handily defeated Godwinson in the Battle of Hastings.

The two battles had the following consequences:

- the end of the Viking Age, an era that begun at least 300 years earlier

- the end of 600 years of Anglo-Saxon reign in England

- the beginning of 300 years with Norman rule in England

The cultural, and political consequences were nothing short of enormous.

Judging from the history of inflation, war was an almost unavoidable consequence in 1066. But the chain of events and the outcome was impossible to predict with any degree of certainty.

Let’s switch back to the whip analogy. Although inflation in recent time has continued to dictate politics and create war after war, I don’t believe we can deduct that this will intensify and end in some sort of a catastrophic climax. There are two major differences when we compare the situation today with the past: Firstly, we now have a vehicle that can take people and whole nations to an escape door. And secondly, this vehicle has a catalyst that also is recent invention, but which now has matured enormously.

The vehicle is Bitcoin and the catalyst is Internet and social media.

For the first time in human history, we now have a type of money that makes it possible to escape from the King’s coins. And if a major war is under way, people will warn each other at the speed of light using Internet and whichever channels that remain open.

If inflation-fuelled governments opt for a major war, all involved parties will quite possibly destroy their national currencies while the price of bitcoin goes sky high.

The states’ war machines rely on funding from inflation and a functioning payment system. When this breaks down it’s game over, because states will be left with no method for calculating the costs and benefits of alternative actions. Governments may opt for coercion and central planning, but there isn’t any form of politicking that can replace the monetary system’s ability to support complex analysis.

If governments nonetheless initiate a major war, the rulers will commit financial suicide. At the same time, they crown millions of new kings in the form of those who found the escape door at an early stage and bought bitcoin.

The political establishment don’t like this development, but reality must slowly sink in. They begrudgingly realize that Bitcoin is a brake on aggression against their minions and neighbors.

In conclusion, I don’t think we are going to hear the whip cracking. Instead, I believe most of the aggressive energy will fizzle out. The rats and the fat cats will slowly leave their ships, while they try to take some of the bounty with them.

As this goes on, society gradually returns to its normal state. The clowns take off their green wigs and people remember how it is to be kind to each other again.

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Rune Østgård is the author of "Fraudcoin: 1000 years of Inflation as a Policy".