General thoughts on Mark Zuckerberg’s warning of the internet’s role in Authoritarianism displacing Democracy

  • The polarization between democratic systems and authoritarian systems is becoming more apparent as China leverages its growing middle class to project it’s influence on the world stage a strategy that US has been utilizing for the past decades.
  • Facebook is a vehicle for projecting American values overseas.
  • The African continent remains a land grab for the two different regime types. Thus far, China has won out on the physical infrastructure and government level while FaceBook has won out on the community grassroots levels.
  • For the C Suite especially CMOs to execute their jobs well they need to be focused on what’s happening out there in the world as opposed to what’s happening within their own functional organization. It’s the VP of marketing’s job to handle what is within their own marketing organization.
  • Its a time when US companies will need to navigate the international markets while managing the challenges to their American values.
  • The Chinese government has done a better execution on that front with their One Belt Road initiative by clearing the path at the government level to facilitate the unhindered expansion at the commercial level by its enterprises.
  • Western media is working at full Rev to control the narrative frames that drives public opinions.
  • Mark Zuckerberg has masterfully leverage recent trends to reframe Libra as a champion of democratic ideals as opposed to a disintermediation force on central banks around the world.

Related references

Zuckerberg Warns China’s Censored Internet Could Still Win Out
https://www.bloomberg.com/news/articles/2019-10-17/zuckerberg-warns-china-s-censored-internet-could-still-win-out

Apple bows to China by removing Taiwanese emoji

https://qz.com/1723334/apple-removes-taiwan-flag-emoji-in-hong-kong-macau-in-ios-13-1-1/

Christian Dior apologizes for omitting Taiwan from Chinese map

https://www.breitbart.com/national-security/2019/10/17/china-bullies-christian-dior-apologizing-omitting-taiwan-map/

China exerts pressure on NBA to fire key executive for tweet on Hong Kong unrest

https://www.nytimes.com/2019/10/17/sports/basketball/nba-china-adam-silver.amp.html

Solomon island switches relationship to China from Taiwan

https://www.nytimes.com/2019/09/16/world/asia/solomon-islands-taiwan-china.amp.html

Kiribati switches relationship to China from Taiwan

https://amp.theguardian.com/world/2019/sep/20/taiwan-loses-second-ally-in-a-week-as-kiribati-switches-to-china

Southeast Asia balances between Chinese Markets and US defense

https://www.nytimes.com/interactive/2018/03/09/world/asia/china-us-asia-rivalry.html

Facebook Warns Washington That Beijing Wins If Libra Plan Fails
https://www.bloomberg.com/news/articles/2019-10-17/facebook-warns-washington-that-beijing-wins-if-libra-plan-fails

 

 

Book Summary: The book of why, Dana Mackenzie and Judea Pearl

Key take aways

Without a casual model, data science is purely an exercise in data reduction. Statistics can only prove correlation but not causation. The human brain is a natural causal machine and is thus still relevant. Humans should go about identifying causality within our environment and delegate the ongoing monitoring to machines.

Components for consideration

Confounders

B and C are positively correlated but there are no direct causal links between the both of them. Without knowledge that A exists, B and C can be considered to be confounders.

  • A therefore B
  • A therefore C
  • C and B both occur together
  • B does not cause C
  • C does not cause B

Colliders

In the example A and C are considered colliders because both of them will result in B

  • A therefore B
  • C therefore B

Figuring out the coefficients

  • A therefore B
  • B therefore C
  • D therefore C

Front door techniques

Figuring out the cause model via path of A -> B -> C. This approach is only possible when you are able measure A, B and C

Backdoor techniques

Figuring out C by isolating B and D. This approach is used when not the entire causal chain is measurable.

Constrains on world GDP levels

Absolute constrains

  • Break throughs in fundamental science
  • Level of human population
  • Size of geographical mass under occupation – currently Earth

Transient constrains

  • monetary and credit supply levels
    • inflation
    • deflation
  • proliferation of scientific techniques
    • full proliferation results in zero or negative ROI when further credit is employed
  • ease of population, trade and credit/money flows around the world

Related references

Simultaneous inflation and deflation pressures in China

China simultaneously experiences imported deflation and inflation. 

Drop in global demand for exports causes credit to unwind within the manufacturing sector. 

Swine flu and depleting foreign reserves causes price pig to increase. 

This will be a useful case study to observe the monetary and fiscal policy China implements to deal with simultaneous inflationary and deflationary pressures. 

China Factory Deflation Worsens as Pork Drives Consumer Prices  https://www.bloomberg.com/news/articles/2019-10-15/china-factory-deflation-worsens-as-pork-drives-consumer-prices

Bloomberg does AB testing

Fascinating AB testing observed on the entire world’s population by major news networks. 

Barely 72 hours after the announcement of phase 1 trade deal, its accompanying mass euphoria and surge in world markets, the almost same exact photo with some slight changes in copyrighting and background color is released into production. 

It will be fascinating to observe the world’s reaction to this new AB year variant that just got released and the corresponding market price levels. 

Ethereum smart contract introduction – HackerDojo

Library overview

The library for interacting with an Ethereum ABI
https://www.sbt-ethereum.io/tutorials/getting-started.html

An example of a smart contract
https://github.com/swaldman/eth-quip-client/issues/1

Information about the contract
https://etherscan.io/address/0x2a03eb37c0077dba0814a004bc53f2567b7587a0#code

Checking the cost of ether to gas
http://ethgasstation.info

Listing your key
ethKeystoreList

Creating a new wallet
ethKeystoreWalletV3Create

Set your default ether wallet
ethAddressSenderDefaultSet MY_ETH_KEYSTORE

Override your default ether wallet
ethAddressOverride  MY_ETH_KEYSTORE

Importing a contract for crypto kitties
ethContractAbiImport 0x2a03eb37c0077dba0814a004bc53f2567b7587a0

Reading from the blockchain is free.

  • ethTransactionView quip getQuip 0
  • ethTransactionView cryptokitties totalSupply

Writing to the blockchain requires the creation of a transaction. Creating transactions require gas.
ethTransactionInvoke quip addQuip “This is pretty boomz”

Ether has a fluctuating exchange rate for gas. Paying higher gas ensures transaction gets prioritized and mined.

Sending ether to an address
ethTransactionEtherSend MY_ETH_KEYSTORE 0.01 ether

Checking balance in an ether wallet. Balances in all wallets are public
ethAddressBalance  MY_ETH_KEYSTORE

To send money to your local wallet from coinbase simply send the money to that address from your own coinbase account.

Checking the balance of your contract currency (etherscan)

creating a new coin

  • https://github.com/swaldman/quick-and-dirty-token-overview
  • https://github.com/OpenZeppelin/openzeppelin-contracts

General practices

  • use Solidity as a programming language
  • always emit an event which generate logs that are free to read
  • Etherscan is subjected to man in the middle attack. Important to encrypt your transactions using TLS

Observations

The creator has generally been working on this alone and its a lonely experience. This seems to be common phenomena for creators

An unchanging constant as the source of trust

Trust is the ultimate source of wealth in any society. The level of manifested physical wealth correlates positively with the level of perceived trust members of society have for an entity.

When an entity, be it a phenomena or a behavior, is observed to be consistent across time without much falter, it soon becomes accepted as the norm. Overtime this norm gets deeply embedded within a society and becomes an integral part of its culture. It thus becomes trusted and a source of credibility.

Societal commerce is built on trust. Trust accumulated through consistency overtime can be converted to other forms of tangible currency. These currencies can then be used to direct resources within the society towards the achievement of very material goals.

When comparing between two entities that are embedded within the cultural fabric of society, the one that exhibits a higher level of consistency inevitably gains more trust. This explains why while fiat currencies comes and goes, the value of gold remains consistent across time.

While it might be tempting to equate trust with value, there is a subtle difference. While trust elicits value, value need not necessarily elicit trust.

Expressing the entire civilization’s undertaking at any point in time as an linear equation, any essential variable that happens to be the most restrictive in supply at that point inevitably becomes the most valued. However wide fluctuations in value does not elicit trust in the long run.

Sources of trust

  • the rotation of seasons and our subsequent practice of agriculture
  • the constant speed of light and it’s use in Einstein’s theory of relativity
  • gold with its scarcity and it’s persist use as a store of wealth
  • well run institutions with well defined constitutions
  • fiat currencies with under sound government regimes
  • individuals who exhibit consistent behavior overtime

Qualities of viable currencies

  • Ability to be divisible
  • Ability to be moved
  • Ability as a store of wealth overtime
    • consistent levels of supply
    • scarcity

Functions of currencies

  • a means to facilitate transactions
  • a store of wealth

Examples of trust erosion

Example 1: Michigan Pulls $600 Million From Ken Fisher an individual After Lewd Remarks

https://www.bloomberg.com/news/articles/2019-10-12/michigan-pulls-600-million-from-ken-fisher-after-lewd-remarks

Example 2: 1918 Germany as an institution, towards the tail end of WWI.

When it became evident that the country will loss the war, it experienced increased inability to raise debt to in domestic currency denomination to continue financing its war efforts. It’s currency soon lost it’s reserve currency status and it was increasingly forced to denominate debt in foreign reserve currencies.

Post WWI debts denominated in domestic currency where inflated away through printing of cash by the  German government to pay of debts denominated in foreign currencies.

Example 3: Africa use of glass beads as a failed form of currency

Europe was able to cheaply produce this in abundance . Europeans for a period were able to exploit this asymmetry by exchanging cheap glass beads for valuable natural resources. When value within the African society became depleted,  Europeans were eventually able to subjugate the entire African population and exploit them through the slave trade.

Example 4: Wall Street crash and the Great Depression of the 1930s.

Bankers increasingly became concern of easy credit driving share prices to stratospheric valuations. An eventual tightening of credit lead to rapid deleveraging within the system. The lack of trust within the system prevented the circulation of money and credit. The central bank ultimately had to step in to restore trust.

It did so by first preventing the flight to value. This was achieved through the banning of conversion of USD dollar to gold.

Example 5: An ongoing slow erosion of fiat money

With the deliberate pursuit of constant 2% yearly inflation by central banks around the world current fiat money are failed stores of wealth .

The currency of the Roman Empire is a perfect example of where we will be headed. Overtime less gold per coin is used. Their currency was ultimately replaced by paper which allowed rampant printing by the government during times of war. The effects of inflation eroded the Roman empires currency as a long term store of wealth.

Examples of persistent sources of trust

  • The institution of the Catholic Church
  • The consistent adherence to a set of sound principles by Berkshire Hathaway’s reinsurance business over multiple decades. 
  • Federal reserves consistent adherence to the dual mandate of 2% inflation and low unemployment rates

Conclusion

To build trust is to build wealth. The key to doing so is to adhere and operate on a consistent set of sound principles over across time and in all environments. Being slow and steady is a pre-requisite of this process.

Related readings

Observed unwinding of credit in the market

Priori

  • Federal reserve starts reducing debt bought and brought onto their balance sheet during 2008
  • Federal reserve went on a series of interest rate hike from the period of 2016 to 2018
  • Trump starts Trade war in 2017 resulting in reduced global demand for American exports

Observsations in some sections of the markets

Injecting of more liquidity into the overnight repo market to ensure banks and Main Street have enough liquidity to continued functioning

https://www.bloomberg.com/opinion/articles/2019-10-11/fed-brings-a-bazooka-to-its-fight-with-the-repo-market

Excessive corporate leverage starts to unwind

https://www.bloomberg.com/news/articles/2019-10-09/a-40-billion-pile-of-leveraged-loans-is-battered-by-big-losses

Federal reserve cut second rate

https://www.bloomberg.com/news/articles/2019-09-18/fed-makes-second-straight-rate-cut-splits-on-further-action