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The volume of central-bank warnings about the rise of private cryptocurrencies and the potential impact on the ability of central banks to conduct monetary policy has become ear-splitting. This criticism only serves further to convince libertarians that reducing the power of central banks and governments is desirable. Certainly, the hostility of Chinas authorities towards private cryptocurrencies can be presented as evidence that they are viewed by the state as a defence against intrusive social control. But whether that point of view is correct, or where it concerns monetary control rather than social control it is dangerously naive, there is another, undeniably serious problem with cryptocurrencies. Its a problem so far only hinted at by central banks, but about which libertarians should be the most worried. The problem is about bubbles.

There are now many bubbles in the world but they differ in nature and consequences. An equity bubble can be perfectly rational. The price of equities can keep rising without end, assuming that real (adjusted for inflation) interest rates do not go up and stay up. Assuming a growing global population, the supply of greater fools to sell to at a higher price is theoretically endless. The idea of a bond bubble is harder to rationalise. Unlike equities, virtually all bonds have a terminal date their maturity date. If you buy a bond with a negative interest rate (a negative yield), you know for sure that you will suffer a nominal loss if you still own it when it matures (the loss will be even worse in real terms). So if you are worried that other assets are overvalued and might crash, why not just hold cash?

Yet many professional investors currently own bonds trading on negative yields. This only makes sense if they expect rates to go even more negative, producing a capital gain (bond prices and bond yields move inversely to one another). But even then, the price of the bond must eventually go back to par (its face value), inflicting a capital loss on whoever had bought it at a price above par. Implicitly then, the expectation is that the ultimate greater fool will be the central banks, who are not motivated by returns and can expect to be re-capitalised by their governments albeit at considerable cost to their independence should capital losses threaten their solvency.

Bubbles both in bonds and in equities are symptoms of a deep-rooted disequilibrium in todays advanced economies. The downward trend in real long-term interest rates which has persisted throughout this millennium and has only been accentuated by the pandemic, fuelled the bubbles which have been needed to regain and maintain full employment and fend off deflation. Why has this happened?

Interest rates are intertemporal price signals they balance supply and demand for money across time. When these signals go awry, it results in the misallocation of resources across the economy. Our current disequilibrium stems from the second half of the 1990s. Then-Federal Reserve chairman Alan Greenspan failed to allow real long-term interest rates to rise at the right time in response to very buoyant entrepreneurial expectations in the internet-driven new economy.

As a result, not enough spending on consumption was deferred during this period. Indeed, the dotcom-era equity bubble boosted spending even further. As a result, when extra new economy supply came online, there was no pent-up demand from previously-deferred spending (ie, savings) to take it up. That error, combined with the far less innocent catastrophe of monetary union in Europe, ensured that intertemporal price signals ie, interest rates went badly wrong and have been wrong ever since. A secular trend to ever-lower rates and ever-bigger bubbles was put in place.

The equity bubble, in particular, has created the illusion of wealth. It is illusory for economies as a whole because it is not based on vastly increased future productive potential (if anything, estimates of such potential have persistently been cut). The political implications of the resulting wealth inequalities are disturbing, but have not so far produced serious trouble. Thats because they have not caused overheating in the economy: the extra spending generated by this illusory increase in wealth has offset the drag of the intertemporal disequilibrium (in which past bringing-forward of spending from the future leaves a hole in demand as the future becomes the present).

But if dangerously high levels of public investment spending produce inflation as many fear they might in the UK and, particularly, in the US some holders of equity wealth might think they should spend more of that wealth before its real value falls. But the only way they could do that without producing a spiral of ever-increasing inflation, is if everyone elses spending were to fall. Distributional concerns then really would become a major political issue.

Yet there is another, even more dangerous bubble that has developed in the past few years. This is one that, if unchecked, is bound to produce cataclysmic changes in wealth distribution. That bubble is in private cryptocurrencies. As with equities, cryptocurrencies have no terminal date. So a bubble can be rational in the same way. However, once the macroeconomic context is considered, it becomes clear that the bubble must pop.

Why? Either the market price of bitcoin, for example, can become infinite or it cannot. If it cannot, then at some point the only possible change in the market price of bitcoin is negative. At that point, all holders would want to sell (unless central banks as with bonds were expected to support the bitcoin price indefinitely!).

If instead the price can and does move towards infinity, then the use of an infinitesimal amount of a single persons bitcoin wealth would exhaust all the worlds productive potential; that is, each holder could command all the worlds resources by being the first to sell and spend. The rise in the general price level towards infinity as bitcoin holders competed for resources would impoverish everyone else.

It is clear that many governments most relevantly the US government now want to produce huge wealth transfers. Whether they are right or wrong is a matter for debate. The key questions are: how to distinguish in practice between what I have called acceptable wealth (wealth whose possession does not entail a reduction in lifetime consumption possibilities for everyone else) and unacceptable bubble wealth, whose possession does reduce lifetime consumption possibilities for everyone else?; and how to eliminate unacceptable wealth without crashing the economy.

But whatever your view, the wealth transfer that bitcoin threatens to produce is definitely not the one that the US government or any other wants to produce. When the bubble is growing, it does not create extra wealth in the form of future productive potential for an economy as a whole. It simply transfers wealth to existing holders of bitcoin from everyone else. That creates pressure on everyone else to join in.

To avoid serious social and political discontent, leading to unrest and ultimately sociopolitical breakdown, the authorities will have to burst the bitcoin bubble before its macroeconomic importance becomes much greater. The similarity with bank runs is rather clear. If none of, say, the ten biggest providers of liquidity to Lehman Brothers had withdrawn their funding, in all probability no-one else would have done so. If those ten withdrew their funding, in all probability everyone would do the same. Similarly, as the ratio of illusory-wealth-to-potential-income in the economy gets bigger and bigger, the temptation for someone to jump ship and be the first to use their assets to acquire real resources becomes greater and greater.

Indeed, one can view the inverse of this illusory-wealth-to-potential-income ratio as the equivalent to a banks capital ratio during a financial crisis. That ratio moves in the wrong direction as the illusory nature of many of the banks assets becomes apparent. In turn, the incentive for its debt-holders to withdraw grows ever greater. It is deeply ironic and tragic that while the reaction of central banks and regulators to the financial crisis (which they themselves created) was to insist on higher capital ratios for banks, monetary policies have operated, and continue to operate, to weaken the economys capital ratio. Barring a radical change in the policy framework, the likely result will be a devastating economic, financial, social and political crisis far worse than anything that might have been produced by the 2007-9 financial crisis. Marxists might rejoice in such a prediction. Libertarians should be anxious to prevent it from coming true.

The longer that central banks wait before taking action to prevent a swelling of cryptocurrency bubbles, the more difficult they will make their task. Bank of England governor Andrew Bailey has warned bitcoin investors that they risk losing all of their money. But if the bubble first gets much bigger, its bursting will have significant macroeconomic effects, as spending financed by borrowing against bitcoin wealth vanishes. Worse, devastating losses will be inflicted on speculators, among whom will be more and more ordinary households. The fact that they have been warned will not prevent potentially seismic reactions.

Central banks and regulators thus now have an unenviable choice. Presumably, they will not want to be blamed by crypto investors for a burst bubble. So they may hope that it subsides of its own accord, then regulate it out of existence. But if the bubble keeps growing, they must grasp the nettle and inflict losses now, or face a future sharp-elbowed scramble to convert crypto holdings into goods and services, which will produce hyperinflation and destroy society.

Continued here:
How a bubble in bitcoin could lead to hyperinflation - MoneyWeek

When it comes to online censorship, few voices outside the Western mainstream are safe. Not even a US president. Now, this near-total lack of accountability among tech giants is pushing states to develop sovereign internet spaces.

Over the past few years, China and Russia have taken the lead in nationalising the internet, putting their own mark on the online world and championing alternatives to foreign platforms. As a result, somewhat predictably, both governments have been accused of attempting to clip the wings of the supposedly ultimate space for freedom of expression, turning it into an instrument of government power.

Increased state control over the digital space deserves scrutiny and, in many cases criticism. But the efforts in Moscow and Beijing to assert national control over what goes on online is a reaction to what is perceived there as increasing digital authoritarianism on the part of the US.

As Washingtons power in the world wanes, the US has become increasingly inclined to use its role in the global economy, its international companies and its place in major international institutions to coerce both adversaries and allies to uphold its former authority. The natural consequence is that its rivals have sought to reject American influence online, as well as offline.

The internet rolled out around the world at the height of US power, when globalisation meant organising the world around American technological platforms. Other nations are now worryingly dependent on its digital exports, and at the mercy of seemingly unaccountable decisions about what needs to be removed or de-listed, and what should be published and applauded.

The creeping censorship by US tech giants demonstrates the dangers of concentrating communication technologies in the hands of a few American corporations. Censorship was first justified by merely targeting a few radicals spreading hate and disinformation. Predictably though, the definition of radicalism, hate and disinformation has only continued to widen.

As well as direct censorship, foreign entities are also targeted by undisclosed manipulation of algorithms, with shadow-bans and other tools. There is little pretense that this isnt political Mark Zuckerberg has explicitly offered to ally Facebook with the US government to target Russia, Iran and other bad actors, which is a euphemism for Washingtons adversaries.

Censorship on social media platforms soon spread to banning people from online payment and funding services. Alternatives to many of these digital institutions are few and far between, with digital corporations marginalised in the US, and even domestic rivals such as Parler facing being purged from the internet.

Whats surprising about this is that the web is a decentralised network, and the decisions that make the most difference here have been taken by a host of private companies almost in unison. But the bits of the internet that governments can control are also being weaponized.

A key part of digital infrastructure is the Domain Name System, which connects the user with the correct server. The Domain Name System is controlled by the Internet Corporation for Assigned Names and Numbers (ICANN), which supposedly became an impartial, neutral and non-political organisation in 2016 to promote trust in a unified and centralised internet.

However, ICANN recently proved itself to be an instrument of the US government, as it seized the web domain of Irans Press TV state broadcaster and 32 other websites in a blatant assault on the media. This represented a continued escalation of US digital authoritarianism, although it does not necessarily come as a surprise to anyone who has watched how the SWIFT financial messaging system underpinning international transactions has also become an instrument for US economic sanctions. Thats despite it being officially neutral and non-political.

Digital authoritarianism will become an ever-growing threat in the current Fourth Industrial Revolution, as tech giants expand from communication technologies to industries that previously belonged to the physical world.

The digital behemoths that once just provided search engines, social media and e-commerce are now reinventing and revolutionising transportation, manufacturing, agriculture, the medical industry, restaurants, energy, finance, currencies, armies and almost every aspect of the economy and society. The potential reach of digital coercion becomes difficult to grasp and represents a profound security challenge.

American efforts to establish dominance require the destruction of the competition, and 5G technology is a key focus as a foundational block of the Fourth Industrial Revolution. Alternative providers that have a handle on the hardware underpinning it are seen to be profoundly unacceptable. For that reason, the US began its attack on Chinese tech-rivals such as Huawei by arresting its CFO, sanctioning the sale of computer chips, suspending Huaweis Android license, pressuring countries to ban or limit Huaweis participation in developing 5G infrastructure and making Huawei a central focus of in the anti-Chinese information war.

China and Russia have taken the lead in breaking away from the US digital ecosystem to reduce the growing risk associated with digital dependence on Washington. Initially, technological sovereignty entailed ensuring that domestic digital platforms were dominant, such as search engines, email providers, social media, e-commerce etc.

Cooperation between China and Russia also aims to strengthen their national digital ecosystems and circumvent sanctions by, for example, developing alternatives to Android. As Russia develops domestic alternatives, it also has greater negotiation power vis-a-vis US tech giants to demand they store local data within Russia and establish offices in the country to ensure they can be held accountable to domestic laws and pay taxes.

The rise of US digital authoritarianism is also creating the splinternet in which the online sphere becomes divided and regulated by different countries. Trust in a responsible US administrative role in the World Wide Web has been lost. As a result, China and Russia have taken the lead in moving from digital dependency to internet sovereignty with ChinaNet and RUnet. These initiatives mean they can potentially isolate their national internets from the wider world. To underpin this, China is laying new internet cables to connect the wider world to their domestic digital environment, creating new regional networks.

Even smaller powers are taking action against the rise of US digital authoritarianism. Nigeria, with its more than 200 million citizens, recently pulled the plug on Twitter. The banning of the microblogging site was a reaction to the American social media giant deleting a tweet by the Nigerian president in a crude display of censorship and domestic interference.

As the US increasingly uses its digital leadership to police the world, its clear the world is looking for alternatives. Even the US-allied Europeans are growing weary of the immense power of tech giants as they are too big to be governed, have a dubious relationship with American security agencies and enable Washington to undermine European sovereignty with extraterritorial jurisdiction.

Economic sanctions represent government interference into the market to advance a foreign policy, and the sanctioned states predictably react by reducing their dependence on the belligerent power.

In the age of US digital authoritarianism, the predictable consequence has therefore been the development of parallel digital ecosystems and the splinternet, with countries like China and Russia breaking off and setting up their own sovereign national systems. Unsurprisingly though, it is these two nations most frequently accused of threatening freedom of expression online.

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The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.

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As US social media giants censor free speech online, Russia & China lead the charge to break free from American control of the Web - RT

We have destroyed the myth that Fidesz is unbeatable, Gergely Karcsony said after defeating Viktor Orbns party in Budapests mayoral race in 2019. Now, he hopes to prove it at the national level too.

After 12 years, Orbn claims near-complete control over Hungarys public funds, its institutions, and its media ecosystem. Hungarian elections are free in the sense that no one stuffs the ballot box, Pter Krek, the director of the Budapest-based Political Capital Institute, told me. I think we are heading towards a point of no return where it will be practically impossible to replace the government through elections.

Karcsony, the main challenger to Orbns dominance, is undeterred. Speaking from his office in the Hungarian capital, he told me the countrys bestperhaps its onlychance at defeating Orbn lies in opposition parties banding together, as they have since the beginning of the year. While the individual parties in this united coalition each claim only a fraction of the total vote, together they are projected to be neck and neck with Fidesz when the country heads to the polls next spring. For the first time in more than a decade, no one knows what the outcome of the Hungarian elections will be. It might be the last chance, Karcsony said. If we lose now, that would have major consequences.

Winning the election is only half the battle, though. Even if the united opposition manages to form a government, it faces the arduous task of reversing Hungarys democratic declinea process that has seen its institutions undermined, its media curtailed, and its resources exploited by Orbn and his allies. Taking power will be hard, but the de-Orbnization of Hungary will almost certainly be harder.

The oppositions goal isnt simply to unseat Orbn or even to return Hungarian democracy to its pre-2010 status. That system did not provide enough democratic safeguards, Karcsony told me, noting that though the period between 1990 and 2010 was when Hungary was perhaps at its freest, that freedom still couldnt prevent the countrys authoritarian turn. We do not want to go back to the pre-2010 system. We want to go forward and create a new system.

This challenge isnt unique to Hungary. In the United States and Israel, opposition factions have proved that temporarily setting aside differences and joining forces can overcome entrenched and autocratically inclined leaders. But those countries examples have also demonstrated the fragility of such coalitions, and the challenges that come with undoing damage already wrought.

Orbns influence on Hungary will not end when his tenure does, much in the same way that Donald Trumps and Benjamin Netanyahus legacies loom over the United States and Israel, respectively. Like the former American president, Orbn can be comforted by the fact that many of his actions, particularly his packing of the countrys courts with loyalists, will endure long after he exits politics. And like the former Israeli prime minister, Orbn is no stranger to being in the party out of power, where he will no doubt be willing to waitor more likely pushfor the governing coalition to collapse.

If the Hungarian opposition succeedsnot simply in winning, but in undoing Orbns damaging legacyits strategy could prove instructive for opposition movements in other budding autocracies. If it fails, Hungarys next election may be, in the deeper democratic sense, its last.

The Hungarian opposition banded together in December, but the idea to do so came nearly a decade earlier. In 2011, Karcsony, then a member of Parliament for a green-liberal party, told a Hungarian newspaper that only by joining forces would the opposition stand a chance at beating Orbn, who since returning to power the year prior (his first stint as prime minister was from 1998 to 2002) was already redrawing the electoral map in Fideszs favor. Karcsony was better positioned than most to understand the political calculus: Before entering politics, he had made his name as a pollster and political scientist who specialized in electoral behavior, public opinion, and election campaigns. Understanding the shifting dynamics in Hungarys political landscape was literally his job.

Karcsony told me (via an interpreter) that, for a long time, opposition parties simply couldnt overcome their deep-seated political differences. It wasnt until after Orbns third consecutive victory in 2018, by which point his consolidation of power was well under way, that they began to take the idea more seriously. The 2019 municipal elections, during which opposition parties tested their united front, was a very good laboratory for the coalition to experiment, Karcsony said. It was a good springboard for him, too. The Budapest mayor is widely seen as the front-runner in the race to be the oppositions unity candidate for prime minister.

Several people I spoke with for this story, including friends and allies of Karcsony in Budapest, told me that he is, in many ways, the exact opposite of Orbn: While the Hungarian prime minister fits comfortably within the global far right, Karcsony hails from the green left. While Orbn is largely associated with the Hungarian countryside, where his core base resides, Karcsony is seen as part of the countrys cosmopolitan intelligentsia. Orbn is an illiberal strongman whose politics is defined by a rotating cast of enemies (among them Muslim migrants, LGBTQ people, the Hungarian-born financier George Soros, and Brussels); Karcsony is an environmentally friendly progressive who preaches consensus-building and compromise. Orbn is old and familiar; Karcsony, 12 years the prime ministers junior, is a fresh face. He is short and fat, and I am tall and slim, Karcsony recently told The Economista gag for which he later apologized. (Orbn probably wouldnt have.)

Being anti-Orbn isnt enough to win elections, thoughat least not for any single party or politician. A united opposition would give Hungarian voters a viable alternative. That didnt exist in 2018, Gbor Tka, a senior research fellow at the Central European University and the editor of a blog about the Hungarian elections called Vox Populi, told me. If you voted against Fidesz, you voted for complete uncertainty.

A vote for the united opposition would be more than just a vote against Orbn. If elected, Karcsony said one of his main priorities would be to help Hungarians overcome the economic hardship caused by the pandemic (Of all the countries in the EU, the Hungarian government spent the least, he noted). Correcting the social injustices done in the past 12 years would be another.

But there are some things that a united opposition might not be able to overcome. For starters, theres Fideszs control over the countrys airwaves and state coffers, as well as Orbns reengineering of the Hungarian electoral system, including gerrymandering the map to benefit Fidesz and extending voting rights to hundreds of thousands of ethnic Hungarians in neighboring countries, the majority of whom are Fidesz voters.

Ben Rhodes: The path to autocracy

None of this suggests that next years election will be fair or, arguably, even all that free. Orbn doesnt follow the classic authoritarian playbook of jailing opposition politicians, arresting journalists, or violently cracking down on protesters, as is so often the case in places such as Russia or Belarus. But Hungary hardly meets the threshold of a democracy eithersome scholars opt for alternative labels such as soft autocracy or competitive authoritarianism. In Hungarys case, this means holding elections while simultaneously undermining the oppositions ability to compete in them.

If step one for the opposition is winning, then step two is maintaining the broad coalition long enough to form a new government.

Its a behemoth of a task, not least because reversing Orbns antidemocratic abuses and creating future safeguards would likely require a two-thirds majority in Parliament. It was this supermajority that enabled Orbn to enact sweeping changes, including rewriting the constitution, packing the countrys constitutional court with loyalists, and installing allies at key posts such as the central bank, the prosecutors office, and the media-watchdog agency. Without a supermajority of their own, the opposition will have no chance to replace Fidesz nominees in these public bodies, Krek said. This kind of quite efficient shadow state can block many initiatives of the next government. (It is perhaps a symbol of Orbns success that he is now the one charged with being at the head of a deep state, language populists of his ilk have often used to rail against a faceless establishment.)

Although Karcsony acknowledged the challenges that the opposition would face were it to enter government, he disagreed with the notion that they are insurmountable. There was, he said, no real social legitimacy underlying Orbns supermajority, arguing that once the supermajority ends, Orbns structure of influence will fall like dominoes.

Read: Viktor Orbns war on intellect

Orbn has already set his sights on the opposition, dismissing the united coalition as the brainchild of the real enemy, Ferenc Gyurcsny, Hungarys deeply unpopular former prime minister. He has also, tellingly, transferred the control of nearly a dozen state universities, as well as billions of euros in public funds, to private foundations run by his allies, in an apparent bid to solidify his influence should his party lose power.

Those are the signs not of a regime that is certain of victory, Michael Ignatieff, the president of the Central European University, which Orbn successfully drove out of Hungary in 2018, told me, but of one trying to protect itself against reversal.

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The Last Chance to Stop Autocracy in Hungary - The Atlantic

DUMAS A project to fully rehabilitate US 87/US 287 from south of the Dumas city limits to about a half mile north of County Road I is set to begin Tuesday, July 6. The project will include concrete paving, storm sewer, curb and gutter, traffic signals, signing, and striping. Sidewalks will also be included on both sides for pedestrians and the existing on-street parking in town will remain.

This ultimate goal of this project is to provide long-lasting, durable, and low-maintenance pavement while improving safety along this corridor, says Dumas Area Engineer Bernardo Ferrel. During construction, we will work closely with our customers to ensure business and street access is maintained.

Work will be constructed in phases with staging and traffic control set up starting next week. When construction begins, traffic will be reduced to one lane in each direction. Motorists are reminded to drive with caution through the construction zone and obey all traffic control signs.

This $36.8 million project was awarded to SEMA Construction and construction is expected to last through May 2024. Additional updates will be provided throughout the project.

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US 87/US 287 Rehabilitation Project Set to Begin Next Week - Texas Department of Transportation

WhatsApp is one of the most popular and widely used text messaging services out there. From casual texting to professional talks, users are doing everything on the platform. One thing that I personally refrain from doing is share media on WhatsApp. Why? You ask! Well, the messaging platform is known for reducing video or image quality. Even though you have clicked the photograph using your devices powerful cameras, the receiver will still get the media in low-quality stripping all the good details.

Well, it looks like that low-quality media sharing issue is finally getting attention. According to WABetaInfo, Facebook appears to be working on a new feature addressing the very same issue.

WhatsApp has recently submitted a new update through the Google Play Beta program. With that, the beta version has now bumped up to 2.21.14.6. WABetaInfo has managed to find a new feature that the company is working on. This feature goes by the name of Video Upload Quality. As the name suggests, it allows users to choose between multiple quality options while sending a video on the platform.

As you can see in the screenshot, there are three available options to choose from Auto, Best quality, and Data saver. While you have three ways, WhatsApp recommends using the Auto option. Heres a look at what each option will do.

Its worth noting that this dialog box will only appear while sharing videos on the platform. Theres no word as to whether such options will also be available while sharing images. With that said, this feature is currently under development and should make its way to the public build in the coming months.

Apart from Video Upload Quality, WhatsApp also has another feature under its pipeline. This one is called View Once Messages. In a bid to clean up its image, WhatsApp is planning to introduce a new feature. The View Once mode allows the receiver to view the photos or videos only once. After that, the receiver will not be able to open the media. Of course, there are few quirks attached to it. You can learn more about it right here.

The rest is here:
Tired of WhatsApp lowering the media quality? Dont worry thats set to change soon! - Gizchina.com