I'm using these blogs to get back into the habit of non-trivial writing. It's tough because I'm reading way too much and distilling far too little. This newsletter will be an attempt to put some ideas I've been reading into words:
- Ideas are information that’s stored in a person’s brain and can affect their behaviour
- Cultures are a set of ideas that cause their holders to behave alike in some ways
- Problems exist when there's a conflict between ideas or cultures
- Logical solutions to problems come only when there's complete knowledge of the situation
- Uncertainty of economic events stop us from making logical economic decisions due to the lack of required knowledge
Economic sanctions against Russia–after its invasion on Ukraine–is an interesting case study when considering the points above:
- The United States “immobilized” any Russian Central Bank assets held in America
- This caused a free fall of the Russian ruble to record lows
- Russia's Central Bank regained a third of its losses by hiking interest rates from 9.5% to 20%
- Russian citizens are converting their rubles into crypto to protect their savings
My point isn't to outline cRyPTo gOoD and wAr baD.
It's to state that a country's economic problems are too imprecise to be logically solved–especially by central control. To rephrase, it can be logically solved given the proper knowledge required. We simply aren't there yet.
Until we are, it's important to consider new and existing solutions. Russia's currency is an existing idea that caused its holders to preserve wealth into new ideas. Crypto–especially Bitcoin–might not be a logically correct investment, but its importance lies in the idea to unfold new knowledge.