Clever Cryptocurrency Theft

Beanstalk Farms is a decentralized finance project that has a majority stake governance system: basically people have proportional votes based on the amount of currency they own. A clever hacker used a “flash loan” feature of another decentralized finance project to borrow enough of the currency to give himself a controlling stake, and then approved a $182 million transfer to his own wallet.

It is insane to me that cryptocurrencies are still a thing.

Posted on April 20, 2022 at 8:57 AM68 Comments

Comments

Brillig April 20, 2022 9:15 AM

Cryptocurrency is a good example of theory versus practice. People are excited over what cryptocurrency can do in theory, but they have no realistic assessment of its practical weaknesses.

Clive Robinson April 20, 2022 9:20 AM

@ ALL,

Correct me if you think I’m wrong but,

A clever hacker used a “flash loan” feature of another decentralized finance project to borrow enough of the currency to give himself a controlling stake, and then approved a $182 million transfer to his own wallet.

But is this just another way of doing a “leveraged loan hostile take over” or the flip side, the 15% “Poissond-Pill” trick The idiots on the “Twitter Board” are currently trying?

There is an old saying about,

“Old wine in new bottles”.

Implying that these are not realy “new crimes”, but actually “old crimes in new settings”… Kind of slapping slipstick on an old sow about to go to market :-S

ciphertext April 20, 2022 9:46 AM

@Clive

I was thinking along the same lines as you apparently. I would only add that the “dematerialized” (to quote Michael Saylor) nature of the digital assets and procedures helps to accelerate this kind of event. So rather than taking months to years, you can do these sorts of things in seconds to minutes. The outcome, be it good or bad, is nearly instantaneously recognized.

Winter April 20, 2022 9:49 AM

It is insane to me that cryptocurrencies are still a thing.

Casino’s are still a thing, and they are a negative sum game.

Also, there are bank crises every decade or so. These are all fueled by investment bubbles that start with cheap loans. I really do not see much of a difference.

Moshe Yudkowsky April 20, 2022 9:59 AM

I recall a bank robbery in Chicago, years ago – the thief substituted deposit slips with his account number on them, replacing the ones available in the lobby. At the end of the day he walked out with all the day’s deposits.

In other words, the security flaw here is not in cryptocurrency itself, but in the design of the “finance project.”

Rinze April 20, 2022 10:11 AM

It is insane to me that cryptocurrencies are still a thing.

We’re seeing a bunch of bros learning in months everything that the finance world had centuries to figure out. It’s being amazing.

Ron Helwig April 20, 2022 10:11 AM

Crypto is great, as long as you use a good proof algorithm. This particular hack is an indictment of POS (Proof of Stake, which is also the other kind of POS), but not an indictment of cryptocurrencies in general.
This shows why PoW (Proof of Work) is superior, even if it doesn’t appear to be “green” to shallow thinkers.

tim April 20, 2022 10:47 AM

but not an indictment of cryptocurrencies in general.

Because one doesn’t have to think too hard to come up with indictment of “cryptocurrencies in general”. They are all scams.

Some Guy April 20, 2022 10:47 AM

Given the sheer amount of cryptocurrency rug pulls it’s hard not to question that these majority schemes are a feature for the creators to ensure their own profit and way out. Harder to feel sympathy for anyone trusting this process, and still harder to blame the person taking advantage of the process exactly the way it was designed. By that logic, I think that “theft” is probably the wrong word here Bruce?

EvilKiru April 20, 2022 11:19 AM

@Moshe: I remember a TV show plot from decades ago that involved deposit slip substitution in a bank lobby to funnel all the day’s deposits into a criminal’s account to convince the crime boss that this criminal was skimming off the crime boss’ earnings.

c1ue April 20, 2022 11:31 AM

I see this as more of an indictment on smart contracts.
The smart contract structure underlying the Beanstalk governance system clearly did not stipulate any restrictions, covenants or requirements on the Beanstalk cryptocurrency ownership qualified to exercise control.
And the notion that this is a solvable structural problem seems highly optimistic given the hundreds of years of contract history and ongoing existence of contract lawyers…

Jordan Brown April 20, 2022 11:38 AM

Where is the theft here?

That he borrowed a large sum of money? No.
That he bought a large number of beans? No.
That he then exercised the rules that allow a majority of the stakeholders to approve transfers? No.

Majority-rule systems where you can buy your way into the majority have obvious problems, but majority-rule systems have serious problems in any case. A consortium totaling 67% of the stakeholders could have approved a transfer giving themselves the other 33% of the total. Too bad for the 33%, but majority rules.

G. Other April 20, 2022 11:43 AM

@Clive Robinson

But is this just another way of doing a “leveraged loan hostile take over”

No, that’s not it. This is like asking for a loan of $100M to buy a bank that has $100bn in its vaults, then use your newly acquired control over the bank to order a transfer of those $100bn to your own personal account.

or the flip side, the 15% “Poissond-Pill” trick The idiots on the “Twitter Board” are currently trying?

Not trying, they’ve already done it. It’s a tried and true strategy to stop several types of hostile takeovers. And no, it’s not this either. A hostile takeover is a perfectly legal manoeuvre, same as a “poison pill” strategy. What these people did is very clearly illegal. That doesn’t mean it can be easily fixed though…

Rick April 20, 2022 12:18 PM

I could be wrong, but the way I see Cryptocurrency is I bring a suitcase with a $100,000.00 of FDIC cash to a guy, who then gives me an empty suitcase and tells me what a great deal I just got and I can go on the internet and set up some account so I can look at a picture which is also not really anywhere unless I print it to see my…new money. What happens to my 100K when a billionaire take out the prop-ups when taking out their profits? Why would anyone make this deal? I suppose if it was the only method available for paying a ransom and the person holding your something or other hostage insisted using it.Which of course brings up Ransomware and how it would crash and burn if this nonexistent currency was not accepted anywhere. I’ve never understood this stuff really. What am I missing?

Amused Onlooker April 20, 2022 3:44 PM

So the Congress and the Federal Reserve decided “for the good of the country” to print trillions of dollars. They did this over the objection of many responsible economists, Larry Summers, for one. We now have 8+% inflation going higher by the month and the purchasing power of the dollar is crashing.

It is insane to me that the US dollar is still a thing.

SpaceLifeForm April 20, 2022 3:47 PM

@ Ted, fib

Supposedly there are over 18000 cryptocurrencies in existance today.

That is a lot of rugs.

It was just days ago[0], Thomas Tusser noted:

“A fool and his money are soon parted”

  1. For small values of centuries

Humdee April 20, 2022 4:51 PM

So I have two responses.

@Jordon Brown

The problem with American democracy right now isn’t they 66/33 problem. The problem is a 50.1/49.9 problem as we see in the Senate. Majority driven systems are always about the greatest good for the greatest number but there is a significant optical difference between the greatest number being 99%, 66%, and 50.1% when it comes to political legitimacy. In theory a win is a win is a win but in practice it is not.

@Amused Onlooker.

Just because you have correctly identified a problem doesn’t mean that Crypto is the answer. Whatever the downside to an inflated greenback those downsides pale into insignificance when faced with the nonsense that is crypto.

SpaceLifeForm April 20, 2022 5:12 PM

@ Amused Onlooker, Clive, ALL

You are a confused gopper spreading fascist propaganda.

You conveniently left out Treasury, and failed to address that the main inflation cause is corporations over charging and not addressing supply chain issues.

There are fascists like Texas Governor Abbott intentionally causing supply chain disruptions to drive up prices just to hurt poor people. Truck inspections causing millions of dollars of rotted produce coming from Mexico.

You probably do not realize that Federal Reserve is NOT a US Government Agency.

Read that again: Federal Reserve is NOT a US Government Agency.

Bringing up Larry Summers was not a good idea.

Looks like you just want to spread FUD regarding the US Dollar, and you have no other point to make.

So, if you have anything to add, or try to refute my points, I will address.

But, I expect crickets.

Clive Robinson April 20, 2022 5:36 PM

@ SpaceLifeForm,

Thomas Tusser noted:

He also noted,

“Naught venture naught have.[1]”

And

“Who goeth a borrowing, Goeth a sorrowing.[2]”

Amongst many others in his philosophical writings in poem “A hundred points on good husbandry” from mid 1500’s on how a man and his family should live life in rural Tudor England[3].

Yup, “The sign of a misspent youth” a barely passing knowledge of “English Lit”…

[1] A variation of an english version of an older French proverb of the times, we now hear said as, “Nothing ventured, nothing gained”. But too oft heard from the mouths of shills and Pump-n-Dump etc investment scamners and con artists.

[2] A forerunner in this case of Shakespeare’s ~1600 more general “Neither a Borrower Nor a Lender Be” from Hamlet, indicating both behaviours can bring both sorrow and loss of friendship.

[3] It was supplemented and reprinted, several times and you can read a later version,

https://www.gutenberg.org/files/51764/51764-h/51764-h.htm

Jordan Brown April 20, 2022 10:29 PM

@Humdee:

The optics are different… unless you’re in the minority.

I wasn’t actually talking about the US, at least not directly. I was talking about naïve belief that “majority rules” is uniformly good. The US doesn’t have a majority-rules system. It’s sort of majority-rules, but it’s constrained by a constitution that limits what the majority can do. Without a complicated nation-wide super-majority, you can’t lock people up for saying stupid things, even if absolutely everybody in your state thinks that you should, even if every single Senator and Representative thinks you should.

Clive Robinson April 21, 2022 6:01 AM

@ John Carter,

I’m not seeing what’s special about Crypto currencies here…..

That’s because you are looking in your glass not at the bottle the wine was poured from 😉

See my,

“Old wine in new bottles”.

Comment above.

Hellvue April 21, 2022 6:19 AM

Clive Robinson • April 21, 2022 6:01 AM

@ John Carter,

I’m not seeing what’s special about Crypto currencies here…..

That’s because you are looking in your glass not at the bottle the wine was poured from 😉

See my,

“Old wine in new bottles”.

Comment above.

oh you are sooo smart, stop talking rubbish you twat!

Petre Peter April 21, 2022 7:05 AM

I am confused. I thought that cryptocurency can help with inflation since the supply of money is coming from a an equation which no one can change. Maybe the problem is that without inflation, governments cannot pay their loans with cheaper dollars.

Winter April 21, 2022 11:00 AM

@Petre Peter
“I thought that cryptocurency can help with inflation since the supply of money is coming from a an equation which no one can change. ”

I think the fundamental error is to assume that you can have a growing or shrinking economy and have a stable currency at the same time.

Before the industrial revolution, prices were stable over centuries. After the industrial revolution, you had inflation (too much demand) or deflation (too little demand). Both can be problematic as left unchecked, both will kill economic growth.

But price stability? That is a rare phenomenon after the Industrial revolution started.

lurker April 21, 2022 12:31 PM

@Winter

The industrial revolution should have relieved us of climate driven variability in a market where the largest traded commodity was food. Are you blaming Adam Smith for our present woes?

Clive Robinson April 21, 2022 1:00 PM

@ Winter, Petre Peter,

After the industrial revolution, you had inflation (too much demand) or deflation (too little demand).

You forgot the interesting one “economists” do not like talking about.

The ICT and other consumer electronics industry have an intetrsting issue.

Normally the price of a good goes up faster than it’s utility, effectively “inflationary”. So there is little point holding of making a purchase (it’s why kids used to get told by a flat/house as young as you can).

Now take “computers” there performance one way or another “doubled” every 18months. Yet the price in fiat currancy remained the same.

That is $1500 got you the latest high end consumer/business laptop year after year… Meanwhile most other things were suffering from fiat currancy price inflation of around ~3%/year. So after a decade what cost $100 was now ~$134, with savings giving at best ~2% you’ld only have ~$125 in the bank…

So if you wanted to buy a high end laptop if you had $1500 in the bank after a decade you would have $1875, so would be $375 up, but the computer would be 100 times more powerfull…

From an economics point of view that is very serious deflation, and very very harmfull. The basics they teach you say there should be no ICT or other consumer electronics industry…

This problem was spreading into “car sales” due to the electronics included, which was proving harmfull in various ways.

But quite a few car manufactures now nolonger “sell” cars to consumers instead they via renamed leasing they call things like “buy back” or “trade up” in essense make you pay monthly usage fee indefinately. They just give you another car with more electronics in it every three years… Which is still effectively deflation by the economists rules.

Some higher end car manufacturers don’t even attempt to hide the fact that all their cars come with all the features built in these days, just disabled… If you pay more each month they enable you to actually use them via an “Over The Air”(OTA) code update. As you legally don’t own the car if you say “hot wired the AirCon” in the car you would be in trouble leagaly… Unfortunately as part of the deal you have to “give them your soul” as well privacy wise.

The old rules of economics are becoming less relavent as we are forced into a “Rent Seeking Econnomy” which once you are in you can not get out of…

Look at it this way, loose your income for some reason, and they turn everything you thought you owned off, or worse down to some barely usable functionalit. But everything will still spy on you 24×365.25 because if you unplug it etc then there will in the near future be some legal clause to make you pay some ridiculous sum for not alowing them to spy on you…

From what I was told AT&T apparently came very close to this model with what some saw as “a stepping stone towards it”. You payed for Internet connectivity plan, BUT they spied on you and sold the data gathered. If you did not want “the spying and selling” the plan was that you would have to pay more a lot more with all sorts of other hooks etc, totalling to something like $30/month more. But… they would still spy and gather data but not “sell it” whilst you payed the ransom / Dane-Gelt. It was not clear what they ment by “not sell” and there was no guarentee they would not sell all your private data at a later date either (apparently somebody decided that the market was not quite ready for that option “yet”…).

Clive Robinson April 21, 2022 2:26 PM

@ lurker, Winter,

Are you blaming Adam Smith for our present woes?

We know Adam Smith either did not know what he was talking about, or he was a liar and probably both for various reasons…

Basically there is historical evidencence in Kirkcaldy in the Kingdom of Fife Scotland that he compleatly rewrote his book several times and changed many of the observational / political hypothesis in it.

It was formulated and written following the most dramatic of economic and political upheavals in documented Scotish History[1].

There are notes, letters and other documents going back well before 1760, and of the five editions in his lifetime the difference between the first in 1776 and the the third of 1784 being so dramatic that the former is effectively unrecognisable from the latter.

However long after Smith was dead it got “tidied-up” and what you will get if you buy it today is realy nothing at all like the first edition, and lets just say it’s been “selectively edited” by the intervening economic historians.

My advice treat it as an excercise in the evolution of payed for propaganda at the behest of first English then later other nations wealthy.

Whilst not quite in the same league as Ayn Rand’s ramblings… Which we also know critically effected the thinking of much touted economic forecaster Alan Greenspan. Who became not only her close friend (some suspect pillow companion) but eventually got to control the thinking and direction of the US economy as chairman of the US Federal Reserve…

As some would say,

“You couldn’t make it up”.

[1] The full title is “An Inquiry into the Nature and Causes of the Wealth of Nations”. During it’s production Scotland was undergoing massive economic transformation that started with the roots of the ill fated Darien Scheme, to establish a Scottish colony in Panama. Which effectively killed Scotlands economy and bankrupted the nation. All told, the futile venture and it’s successors, sucked in around a quarter of Scotlands liquid assets.

It officially started in 1695 the Parliament of Scotland seeing the vast fortunes being made by monopoly trading companies of other European Nations, passed the “Act for a company trading to Africa and the Indies”. Setting up the Company of Scotland, from the start it was troubled due to meddling and differences between English and Scotish directors and politicians. After much argument the Darien Scheme to Panama was chosen to be the major venture. It failed twice and in 1700 the paultry reminents returned to Scotland further ventures to the Far East likewise failed.

This significant economic stagnation and significant hardship in turn led into the “unification” in 1707 with the Company of Scotlands Debt being some 280,000 shillings that got in part takrn on by the English Treasury.

But the hardship created in turn led to major civil unrest. Within two years the French tried to “overthrow” the Unification and establish the “Old Pretender” back on a Scotish Throne. This failed but the Jacobite uprising / rebelion had started and carried on for several years. In 1745 the Jacobites pushed far into England and arguably could have defeated the English and taken London due to the stupidity of the then English deployment of forces. For reasons still historically unclear the Jacobites retreated back to Scotland where a re-organised English army effectively defeated them.

As can be imagined the economic turmoil and deportations caused major changes during Adam Smiths repeated writings of his book.

Winter April 21, 2022 2:36 PM

@Lurker
“Are you blaming Adam Smith for our present woes?”

What woes?

Neither inflation nor deflation are woes per se. A growing economy is unstable. That is the price of progress. So, upheaval is a port of growth, be it puberty or industrialization, or computerization.

Winter April 21, 2022 2:57 PM

@Clive
“This significant economic stagnation and significant hardship in turn led into the “unification” in 1707 with the Company of Scotlands Debt being some 280,000 shillings that got in part takrn on by the English Treasury.”

This is peanuts compared what John Law did to French finances with his Mississippi Bubble. This Ponzi scheme wrecked French government finances so thoroughly that it was one of the material causes of the French revolution half a century later.

Winter April 21, 2022 3:16 PM

@Clive
“You forgot the interesting one “economists” do not like talking about.”

They do, and it is called “increase in productivity”. A computer is not a consumer good, but a means of production, ie, capital. The whole point of the industrialization is to get more productivity for less money.

The problems you describe are caused by the fact that computers are also a consumer good. There are just too many monopolies trying to keep their grips on consumers. That must lead to clashes in manipulation between them.

Clive Robinson April 21, 2022 6:06 PM

@ Winter,

A computer is not a consumer good, but a means of production

As I took care to point out, it’s not just computers but consumer electronics in general most of which can not in any real sense be described as “a means of production”

Unless you consider the change from purchased goods economy to a rented goods economy “a means of production”

But to do that you then have to equate in serfdom and usury…

Which takes us back to the near compleate economic stagnation of the “King Game” and “Estates of man” notion that is in effect a “cast system” and all that entails.

One of which is, oh around 99% of the population having no economic utility as they have no effective agency.

But with regards,

This is peanuts compared…

John Law an immediate predecessor of Smith’s is remembered by quite a few not for the Mississippi Company but the invention of, and all the ills that followed through from his creation of the financial instrument of no inherant value we now call “fiat currency” or bank notes. Through the bank he set up and then persuaded the French King to back which then became the “Banque Royale”. It was the economic hardship Law’s nonsense economic theories created that caused the French Reveloution and much of what was to follow, and still happens to this very day.

Law’s actual significant invention is what we now call “the finance industry” he was perhaps the first “Grand Financier”. If we actually regard it as an industrial process 5
the finance industries “product” is “inflation” by way of manufactured “debt”. It is effectively a licenced Ponzi scheme.

But getting back to the “debt” I mentioned with regards the Company of Scotland. That modest sum was what it was alowed to run up AFTER it had burned through all the invested and other capital.

The bill of which was returned to a select few via ~60% of “The Equivalent”. Which as Rabi Burns noted was votes for gold. Basically all of the 7,961,710 shillings of which was paying off for Scotish Parliment votes for unification.

The result of unification ‘n 1707 was a stagering increase in Scotish taxes for many years there after.

Something those in the US might realise is a similar trick to giving “Covid Payments” to certain US Corporations then using Quantative Easing to create the debt that will be payed back by the increasease in not just direct taxation but indirectly through what is now probably a 400% increase in the US inflation rate…

Oh Law’s ideas influanced Smith’s writings which in turn influenced Karl Marx’s writings. Marx’s ideas supposadly formed the foundational basis for the criminal enterprises that the two “Supposadly” Communist Super Powers of Russia and China.

The real difference perhaps being the “Orthodox Church”[1] in Russia and “Confucianism” in China, being the “Hidden Hand” required for the respective messianic leaders to get acceptance from the populations[2]. In fact some argue that Marxism is just a new coat for the Confucian body under which little has changed.

[1] The real relationship that has finally started to come out might surprise many, as rather than the idea the Orthodox Church was “surpressed” by Communism it actually had a major “resurgence” in terms of influance and power,

https://www.cambridge.org/core/books/abs/cambridge-history-of-christianity/orthodox-church-and-communism/38B6875276D48F14C59D72DF3F3095D7

[2] https://link.springer.com/chapter/10.1007%2F978-1-349-16182-9_7

SpaceLifeForm April 21, 2022 6:11 PM

@ John Carter

What makes Cryptocurrency Special is how fast money can be stolen.

eunice April 21, 2022 7:50 PM

What makes Cryptocurrency Special is how fast money can be stolen.

I call that a feature. It’s hard for me to think of any more effective bug bounty program, and I’m just hoping it doesn’t implode till we’ve made some decent progress on developing secure hardware and software.

SpaceLifeForm April 22, 2022 12:12 AM

@ ALL

re: What makes Cryptocurrency Special is how fast money can be stolen.

In this instant case (Beanstalk Farms), it only took 13 seconds.

Clive Robinson April 22, 2022 12:28 AM

@ SpaceLifeForm, eunice, John Carter, ALL,

What makes Cryptocurrency Special is how fast money can be stolen.

But!!! It’s not real money, just natural numbers, not even imaginary numbers.

You can not own natural numbers, they are not real, there was a court judgment to that effect once…

But that’s the point realy, due to the legal profession and their desire for money, from the hands of those that want to own all and pay nothing for it, we have given something that is quite literally nothing that you can not own like a tangible physical object immense fiscal value.

Worse the legal profession and their desire for money, from the hands of those that want to own all and pay nothing for it, we have given the same nothing life, in perpetual slavery and servitude, but with out the ability to be punished like real living beings

They define them and give them parity with,

“Any person legal or natural”

And we asign them owners and controlers of their actions and destinies whom they serve in name. But as these legal persons have no agency and can not be punished, they protect those who own and control from the concequences of the actions they chose to make through the body legal.

We have alowed to be made out of nothing, entities neither fully alive or dead. That exist in the limbo of the undead imprisond in our minds to serve without thought, moral or care, to simply feed off of others both legal or natural.

Is it just me thinking that the criminally insane who want all, but pay not for their actions, realy do run the asylum the legal profession has forced us in for “fourty pieces of silver”?

Just a thought, afore I go to sleep,

“How did we sleep walk into this nightmarish trap of our own devising?”

As Shakespeare had Hamlet note[1],

To sleep… perchance to dream. Ay, there’s the rub;
For in that sleep of death what dreams may come?
When we have shuffled off this mortal coil,
Must give us pause…

Was Hamlet thinking of the undead in the nothingness our dreams give ghostly form, directing us to do the unspeakable and imoral?

Beware, not the ids of March, but lawyers reading Shakespeare 😉

[1] The “To be or not to be” speech from William Shakespeare’s tragedy “Hamlet”, Act III, Scene I,

https://poets.org/poem/hamlet-act-iii-scene-i-be-or-not-be

Based on a tale from the thirteen hundreds, “we think” it’s first edition was finished in 1600 and revised in two further editions in later years. However there is an earlier Ur-Hamlet that could have been written by Shakespeare. Either way it is his longest and most complex plot work, and there is much that people can usefully learn from it.

Winter April 22, 2022 1:18 AM

@Clive

Law’s actual significant invention is what we now call “the finance industry” he was perhaps the first “Grand Financier”. If we actually regard it as an industrial process

The financial industry is so dangerous because it is so useful. Knives and cars kill people, but our lives would be a lot harder without them. Fiat money and the financial industry are inherently dangerous, but without it, there would not be pensions (a Scottish invention), insurance, savings, or mortgages. Things everyone will need in their lives.

But you take a pervasive problem, people (Americans) living on credit, and blame it on the electronic industry.

I see the problem lying in a different court. There are people, not naming names, who believe a free market is antithetical to a strong government. But all of history shows that no free market existed without the protection of a strong power. We see it in, eg, the Anglo-Saxon world, where anti-government sentiments give rise to a weak government supporting a crony system of monopolies, oligarchs, and Kleptocrats.

The real relationship that has finally started to come out might surprise many, as rather than the idea the Orthodox Church

All organized religions are “communist” in the worst meaning of the word. Picketty calculated that the official church in every country owned ~30% of all assets (everything) of that country in communal ownership. A monastery is the prototypical Communist community.

Clive Robinson April 22, 2022 2:27 AM

@ Winter,

But you take a pervasive problem, people (Americans) living on credit, and blame it on the electronic industry.

No, that’s putting the cart before the horse. People use debt to buy most other things as well.

My observation is that consumer electronics pricing over time is an exception to the economists rules.

The implication being those rules are unsuitable or insufficient to build theories on. Thus the “House of Cards” caution has to be considered.

Clive Robinson April 22, 2022 2:57 AM

@ Winter,

But all of history shows that no free market existed without the protection of a strong power.

As you know I’m not particularly in favour of either as history shows both have a nasty habit of “crashing and burning”.

I’m in favour of “regulated markets” as history shows that regulation “can”,

1, Prevent the downward spiral free markets converge on.
2, Set standards to make the product of a market “safe”.
3, Which in turn generaly drives inovation.
4, Inovation generally broadens the market and encorages growth.
5, Market growth is seen to have economic benifit.

The weasle word is “can” or to put it another way, “regulation” is a spectrum. At one end of “no regulation” you have a downward spiral develop, as you approach the other end of “full regulation” the market can not bare the cost of regulation so colapses under it.

Either way innovation within the market stops and shortly there after the market dies, unless given “life support” from the “communal purse”. Which for some foundation services may be a necessity (think infrastructure and similar sociatal needs that “lift all boats”).

Thus the trick is to find “the right regulation”, and the only thing we know about that is they are not found by vlindly or slavishly following political or similar mantras, idiologies, etc.

It’s why I look for both the positives and negatives in not just a system but the interplay of a system of systems.

Winter April 22, 2022 3:09 AM

@Clive

I’m in favour of “regulated markets” as history shows that regulation “can”,

Which is what I mean with “strong government” to keep markets free.

Just like Democracy is a system where the people oust their government, a free market is an economic system where companies get bust. Any system that prevents the governing people from being ousted or a company from getting bust (these tend to co-occur) is not a democracy, respectively, a free market.

Winter April 22, 2022 3:13 AM

@Clive

My observation is that consumer electronics pricing over time is an exception to the economists rules.

Not exactly. Electronics pricing is driven by monopolies and oligopolies. Monopoly pricing is a well known phenomenon.

The reason monopolies are so prevalent in this industry is that the production is cheap, but is only possible at enormous scales. For many things, producing them is not worthwhile unless you can sell hundreds of millions, or even billions, of them. This means that there can only be one or at most a few who can produce the stuff.

Who? April 22, 2022 6:04 AM

It is insane to me that cryptocurrencies are still a thing.

Cryptoassets, not only cryptocurrencies but also those assets that cannot be used as currency but as storage of value, are the future.

We must not mix cryptoassets and institutional policies.

JonKnowsNothing April 22, 2022 8:17 AM

@Clive, @Winter, @All

re: Americans living on credit

I qualify on both counts. So I will share some historical perspectives with y’all.

Long ago, before the moon landing, credit was given by local stores and merchants. “I will gladly pay you Tuesday for a hamburger today”. Merchants had a tote-list of who owed what and when payday happened or crops got sold they got paid off. It was short term; or relatively short term because crop failure happens and the store just kept the tab going.

Then came a “bank issued card”. It was hard to get, you had to have nearly as much money in the bank as the card limit. Getting a card for $500USD was a mark of “a good paycheck and good citizenship” (as in being a good person like in school grading cards).

This bank issued card, allowed the purchase of items that one otherwise could not get. My grandparents and parents buying their first in home washer and dryer and a freezer. It wasn’t until much much later that we bought TV/Color TV but only after the washer-dryer-freezer had been “paid off”.

It didn’t take the banks long to discover: The Velocity of Money. This is when using a bank credit card became more common and it was used for other purchases. Most stores still had their own cards and ran their own Account Receivables. Later nearly every such store, aka Department Store, was strip-mined and chain sawed into oblivion.

However, now something different began to take place. Wages and Real Living Standards started to stagnate and decline in real terms. Our current financial meltdowns are replicas of this situation but it’s not new, it’s been going on for decades.

Consider:
The TV show “All in the Family”. Archie Bunker a blue collar, under educated worker can buy a basic house for his family and provide a home for his daughter and her husband. 1 salary. ~1970

This hasn’t been true for a very long time. The credit card was the only way to make ends meet. The only way to buy food and clothing, as the department stores faded away, and were replaced by Big Box Stores and Predatory Merchandisers. It was no longer possible to “pay off” the card and rolling balances were normal.

This did not escape the notice of the Financial and Banking System. Interest on the 7:10 rule was Good for W$$ and for bonuses. (1)

More cards were issued, easier to get, when you hit the Available Limit, the banks bumped the limit upwards.

There are generational changes to be considered too. As people aged out, aka died, who had previously looked at long term debt as a personal failure, new generations moved in to the market place who considered Bank Cards to be a normal part of their lives and interchangeable with fiat money.

Banking took notice as did Merchandisers and Home designers and every other sort of “We Sell…” business. The Velocity of Money increased, the balance of trade goods shifted, manufacturing systems changed geographically and the entire system is now based on Debit, High Debt, Forever Debt.

The new mantra was and remains: You can Have it NOW! Open Financing! No Restrictions! No Qualifying! Buy today! No Waiting!

Along with this was the, not surprising discovery, that the Bigger The Price Tag the MORE money the bank, builder, seller made. Why sell a house for $20,000USD when you can sell a larger size for $200,000USD or a supersized house for $700,000USD.

So a supply chain shock comes along and the entire jello-pool starts to shake. (2)

===

Search Terms

Velocity of money

1)
Future Value of $10k invested for 10 years at a constant yield of 7.00%

Future Value of $7k invested for 10 years at a constant yield of 10.00%

2) On Saturday I plan to make my first trip to a Food Pantry to see if I can get a bag of groceries. Not everyone can get one, you have to qualify….

Clive Robinson April 22, 2022 9:44 AM

@ JonKnowsNothing,

I plan to make my first trip to a Food Pantry to see if I can get a bag of groceries. Not everyone can get one, you have to qualify….

There are a lot of “Food Banks” in the UK these days, run by local Churches. Some are Emergancy places that actually deliver a box of food.

Due to having been in hospital during Covid lockdown and being “discharched early” I was not “fully ambulatory” as they so delightfully call it and with “Special Diet Requirments”. The hospital registered me with one.

For a few Saturdys a car would pull up, and someone would get out pick up the empty box from my porch and replace it with one with food.

I would wave from the window to let them know I was alive and sort of well. I never got to know them as people just faces behind masks on the other side of the door. But for all those barriers I was very thankfull to see them moving around “being normal”.

On alternate tusedays a different car would pull up and it would be a different arangment as he was delivering medications that required checking and a signiture.

The bin/garbage men would “crash by” alternate Wednesdays but they did not come onto the property as you had to wheel your bin out to them the night before and wheel it back by lunchtime “Or else!!!” there would be a letter from the council… As I was not ambulatory I got letters and no garbage collection[1].

Fairly quickly they became the most important days of my life at the time. Little as it was they were my only tangible human contact. From my upstairs window where I could see what would be a busy road, it was empty, with the wind blowing small bits of rubbish like tumbleweed in a black and white movie ghost town…

Whilst I was speaking to friends and aquaintances etc[2] over the radio, they were a voice at the end of a wire and could have been and were in some cases half way around the world.

It was a stark reminder that it takes very little for your world to change so entirely and mostly you can not stop it as it has an inertia beyond your stopping and it’s not your fault.

It sounds obvious but it can take a while to realise that you have only three choices,

1, Fail to change and suffer.
2, Do it the “official way” and suffer.
3, Do it your way within the new reality.

Yes you will suffer some with the third way, but it will be different. Because it will be on your terms, as best you can make them and that counts way more than many realise. You will kick-n-cuss but it will be the positive kind, with the necessary anger to move you forwards.

So get down to the Food Pantry, state your case, make your claim, and if you can offer to help them, fair exchange is always good. You might make new friends, see new faces, experience new things, but do it on your terms with grace, politness, firmness and lots of rye humour. A smile and a joke, can break much ice, an angry word would only strengthan.

And a helpfull hand is usually most welcome.

[1] Fines were threatened and talk of Court action, because of course it was my fault[2]… As I had not gone down to the council offices to fill out a form… In a department that was in a closed and locked up building that had no staff in it due to Covid lockdown… Yup seriously, the “home-working bureaucratic mind at it’s finest”.

[2] You did not get to talk to “working people” because they were not on their work-extension, as they were as the voicemail said “away from their desk currently”… The auditory equivelent of one of those nightmares of a distopian post nuclear apocalypse where you run from room to room down endless coridors finding no sign of human existance other than flash shadows on the walls…

Ted April 22, 2022 10:17 AM

@Clive, JonKnowsNothing

To add to that I just took some food up to a drop off place where a local church will come pick it up. The churches do have a lot of great services.

Also, I don’t know how close you are to family, but in a dark time or two, I’ve been really surprised

Winter April 22, 2022 11:08 AM

@JonKnowsNothing

I plan to make my first trip to a Food Pantry to see if I can get a bag of groceries. Not everyone can get one, you have to qualify….

That is sad to hear.

I know about the “history” of US credit. Relatives of mine who have stayed in the States have enlightened me about the absolutely horrible financial services of US banks. This runs from not being able to see what you have spend to inability to automate CC payments to high costs of transferring funds from one account to another. They told me it is always, always much more easy to get into debt than to pay off the debts.

I do understand that after the 1980’s Neo-con (pun intended) revolution of Reagan, median family income and below stagnated, while GDP/family increased:
ht-tps://fredblog.stlouisfed.org/2016/12/the-puzzle-of-real-median-household-income/

Note that median household income increased by 26% 1984-2020, while GDP per household increased by 60% over that period. An awful lot of money was siphoned up in the pockets of a few people.

This 26% increase in median household income includes the increase in two-income households and two-jobs per worker households. Median earnings of men are flat since 1975, those of women increased, but stay below those of men. This means that all increases of median family income are from women working more and earning more per hour.
ht-tps://www.census.gov/newsroom/blogs/random-samplings/2017/09/median_earnings_over.html

You can Have it NOW! Open Financing! No Restrictions! No Qualifying! Buy today! No Waiting!

I do not buy the moralistic angle here. People slide into debt by “accidents”, unexpected, medical, bills, repairs price hikes, job loss etc.
ht-tps://www.nytimes.com/2021/07/20/upshot/medical-debt-americans-medicaid.html
ht-tps://www.commonwealthfund.org/publications/newsletter-article/survey-79-million-americans-have-problems-medical-bills-or-debt

It is clear that, over a whole life, people will pay off their debts, or else the lenders would go down. And wherever I look in the US, I see that the “system” will push you into debt repeatedly and then make it difficult, or impossible, to get out without a hefty cost. So, in the end, you pay a lot extra.

Also, I was shocked about the cost of food stuff in the US. My relatives told me it was more expensive to buy food and cook it than to have it delivered.

Winter April 22, 2022 2:07 PM

@Clive
“You can not own natural numbers, they are not real, there was a court judgment to that effect once…”

All the money I own is numbers in the books of the bank. No more real than any cryptocoin account on a global ledger. And Russia, WikiLeaks, and Iran have seen how “real” dollars in a bank account are.

Like beauty, value is in the eye of the beholder.[1]

[1] Currently, lead found in an ancient sunken ship might be worth more than all the gold and silver it carried.

JonKnowsNothing April 22, 2022 3:11 PM

@Winter @Clive @All

re:
* You can Have it NOW! Open Financing! No Restrictions! No Qualifying! Buy today! No Waiting!

v

  • People slide into debt by “accidents”, unexpected, medical, bills, repairs price hikes, job loss etc.

I think it would be safe to say there are 2 forms of debt here.

1) Everyday debt, needed to pay the bills and food.

This debt is mostly engaged on presumption of “continuing income source”. You buy an extra tray of meat at the grocer because it’s on-sale and you will get your paycheck soon. Over time, this debt accrues and interest-on-interest builds the debt load quickly. This type of debt is were smartphones and technology sales happen because you are encouraged to think you will “pay it off” or “clear the contract” in a relatively short time. The no payments due for 6 months, sale pitch.

2) Catastrophic debt.

This is as you listed. A loss of job or “income source”, unexpected high cost repairs (stolen catalytic converter), high co-pays (20%) or deductibles (60%). Storms, fires, floods, wars, tax jump ups, all lead to catastrophic debt. You might get something if you have insurance, but if you are already tapped out by Type 1 debt, insurances are not high on the purchase list.

Pretty much every country on the globe is now struggling with both types of debts and what to do about them.

Banks are more than able to write off Type 1 debts and resell them to the debt collectors for .01/$1. The interesting aspect of this is the USA Tax code. The bank gets to deduct .99c/$1 off their taxable income (as noncollectable debt). They have cleared the debt and gotten nearly the equivalent in tax deduction. The debt collectors knowing that the debt is already cleared but now have legal ownership of the paperwork (if they can prove that which is another issue) claim the borrower owes full face value. It’s a legal double dip.

Banks really have no skin in the game for Type 2 debts because they can repackage the same debts (loans), or assets (housing) and resell to a flipper or next DIY owner.

In both cases, the costs of living and the uncertainty of life in general, make both types of debt part of current financial boondoggle.

  • You need type 1 debt to buy food.
  • You need type 2 debt to pay for critical medical care.

Together they indicate there is no more bandwidth for “spending” from a large portion of the global population and the numbers are getting bigger.

===

My personal anecdotes may not have any value:

  • My spouse died. My spouse represented 50% of the household income.
  • Costs of medical care, funeral, and all the end of life stuff isn’t cheap.
  • Thresholds, ceilings, floors and other gating mechanisms and lock outs bar other support options.
  • Increase costs of day2day items (food, fuel).
  • Increased costs in long term items (rents, heating, cooling)

So there are both type 1 debts (buying an extra something that my spouse enjoyed) and type 2 debts (paying long term costs) with having 1/2 the income.

To be noted: I am in much better shape than many many others. I am not the only one with this scenario. There are many people with more challenges.

jennette kyler April 23, 2022 3:22 AM

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https://cannabiscookiesshop.com/

Grima Squeakersen April 23, 2022 7:09 PM

@Winter re: My relatives told me it was more expensive to buy food and cook it than to have it delivered. I can assure you that is not my experience, and is generally not so. I expect there are a relatively small number of exceptions (which might include those who only have enough money to buy a single meal or food for one day at a time). The only way that I can see that as a valid observation is if one were comparing “apples to oranges” by substituting chain operation slop for nutritious home-prepared meals. I shop for two retired adults. My grocery budget (which includes such non-consumable items as toilet paper and laundry necessities) is $100 per week. I have not recalculated that budget recently, and items have gone up, so I may be spending $110 – $115 currently. I buy good, tasty foods, including plenty of red meat and other high-protein stuffs. I could probably reduce that cost by 20% if I needed to be as frugal as possible. On the occasions that we order out, we spend on average about $30 – $35 to feed the two of us (dinner). My estimate is the lowest we could get away with and be satisfied with the meal would be $20. We pick up our take-out orders; those numbers exclude delivery costs and tips. So, a week of order out dinners for us would cost $140 – $245, exclusive of delivery charges. And that does not make any allowance for the cost of breakfast or lunch.

JonKnowsNothing April 23, 2022 8:44 PM

@Grima Squeakersen, @Winter, @Clive, @All

re: Ready To Eat, Make As You Go, Sitdowns Elsewhere

Pre-COVID, I (1) stopped being able to afford the cost of a “Nice Sitdown Elsewhere”, so I moved down the price list to the “cheaper Ready To Eat” meals and then to just “Make As You Go” meals.

Pre-career in High Tech, I had a career in the restaurant trade. Pricing is very tricky and each tier or type of food trade caters to just a thin slice of the potential population for that market tier.

High End = $100-$200-$500USD a plate. Turnover time 1hr-2hrs
Low End = $.50-$1.00-$5.00 a plate. Turnover time 10-15minutes

One of the dynamics that happens, is that people shift between tiers depending on the their income levels and their expected income level.

  • If you have a steady job with a good salary and have extra funds, people eat at a higher tier.
  • If you have income insecurity, housing insecurity, and no extra funds you eat at the lower tiers.

People can move up and down the layers as they move through life, and income expectations.

One of the more evident problems today, is not particularly new but it’s more obvious.

  • People no longer have the ability to “Make As You Go” and no funding for “Sitdowns Elsewhere”.

Primarily because they have no means of cooking anything. They have no housing and so they have no kitchen to cook in, or they may have housing but not enough funding to pay the gas and electric bills to cook on a range or in an oven.

Even with social support systems, which only encompasses a small percentage of the affected population, they now ask:

  • Are you Homeless?
  • Do you have the means to cook (a meal)?

Recently a MSM, article describing how people who once had enough to enjoy a “Sitdown Elsewhere” meal have now fallen so far below that level, they have to calculate the cost of cooking.

iirc(badly)
* The problem was the person wanted to make baked potatoes for the family. This would require 1 hour of cook time in an oven. The person decided to make Mashed Potatoes instead. @20-30min of cook time.

If you consider even more carefully, a packet of instant mashed dehydrated potatoes takes 1-2 minutes of microwave energy to heat enough water to make a dish of them.

iirc(badly)
* A person was offered fresh potatoes at a Food Pantry. They declined because they had no way to cook them.

Where you sit along the tiers, affects how you perceive the other tiers. This is a well known economic aspect of the restaurant industry.

What is also true, is that for a large family (4-7), even eating at the lowest level of restaurant tiers, can run into the $100sUSD.

===

1) Not sure the correct way to describe what was 2 and now is 1.

2) fwiw: My trip to the food pantry went very well.

It was done tastefully and tactfully. I got the equivalent of 3 or 4 bags of groceries, with a variety of items, including bread, butter, ground meat, fresh veg (string beans) and some canned items, a full baking kit (flour, yeast, baking soda, cooking oil) and a nice surprise packet with 5 large cookies of different types.

It should be noted that this only works if

a) you have a car
b) you can afford the fuel to drive to the location
c) you have cooking facilities
d) you have the health and strength to stand in line, and cart the bags to the car, and unload them when you get back to digs.

As Clive noted in his commentary, if you are stuck shanks-mare and cannot drive across town, your options are much more restricted.

Thank you Clive for your insights on the topic.

Grima Squeakersen April 24, 2022 10:39 AM

@SLF re: potato cooking methods This is admittedly a nitpick on your analysis example, but it does have a point. If you have a microwave, you can also cook a whole potato, skin-on, in a quite brief time. I haven’t done so in a while, but I beleve it to be under 10 minutes. A whole sweet potato or yam can be cooked quite well in 5 minutes (mashed with butter and a bit of black pepper, that is one of my favorite winter breakfasts). So there isn’t an absolutely rigid set of options regarding cooking methods or costs for many foods. That was the nitpick; the more general point is that having very limited resources places a premium on creative solutions, but most people (probably an even higher fraction of those not working or housed) have been conditioned to never think critically or creatively. Encouragement to counter that tendency could be part of a solution imo.

JonKnowsNothing April 24, 2022 2:36 PM

@ Grima Squeakersen, @All

re: potato cooking methods

A perhaps enhanced view of your observation is:

  • It depends on what kind of food you have available
  • It depends on the type of cooking kit is available

So keeping with the Hot Potato Theme

We are often “nudged” to think that people live in a fully equipped house or apartment, with a functioning cook top and oven and microwave, along with a sink with running hot and cold potable water.

This is increasingly evident that it’s not the case for many. It’s nearly a given that lack of facilities exists on a D2D basis in what are labeled “3d World” countries and economies but in the Hot Potato discussion, the scope is narrowed to 1st Tier Economic Countries (USA, UK, etc).

People in the USA and in my area of California people often have no running water at all. No sewer connections. No well. No direct utility connections.

However, there are 2 groups that have this scenario

1) By choice called Off Grid Housing
2) Not by choice due to Economic Deprivation.

For Off Grid housing, they maintain other methods of having the same functionality as city or urban dwellers. Solar rechargeable batteries, low electrical footprint with energy efficient systems. It’s becoming a larger group with advocates for alternate climate building options. It takes funds because these systems do not have “economies of scale” so the cost to install them is higher compared to other traditional systems. It may or may not be a lower cost of usage over time, that depends on how the design is setup.

The second group experience the same conditions but have no funds or ability to alter their circumstance. It takes funds to put in a septic system and to pump it and if they landlord doesn’t install it or raises the rent whenever they pump the tank, well, the tank isn’t going to get pumped often and sewage seeps into uncontained areas.

If you live in housing without cooking kit, like hotel housing, you might have a microwave to cook the Hot Potato. You might not because the building codes may prohibit the installation of microwaves for that type of housing. Some get it Hot and some still have a raw potato.

If you live in a tent, you might have nice camping gear and cooking kit if you are going up Mt Everest but if you are living under a freeway, you might have the same kit today but tonight the police will come with “slash and burn” instructions to destroy anything you can’t cart away with you. So maybe you had a way to make a Hot Potato yesterday and now your don’t.

People being evicted face the same problems. Their stuff is piled in the gutter and they can take whatever they can carry but the rest is going to the dump. Bye Bye Portable Microwave, no more Hot Potatoes.

We always like to think how we can cope in adversity and that there will always be a way to make a Hot Potato. There are ways that work … sometimes … but not all the time … for all the people.

It’s a Hot Potato for sure.

SpaceLifeForm April 24, 2022 3:26 PM

@ Grima Squeakersen

re: potatoes

The points that JKN made are spot on.

This real life problem also exists on the internet. Where one ISP tries to dump a problem elsewhere.

hxtps://en.m.wikipedia.org/wiki/Hot-potato_and_cold-potato_routing

JonKnowsNothing April 24, 2022 7:48 PM

@Winter, @SpaceLifeForm, @Clive, @All

re: The Hot Potato Problem

While it’s fairly safe to say that hunger or the inability to cook a meal is a deplorable situation, as Winter noted: It’s been going on a long time.

History is full of beggars, alms gates, and various and sundry methods of dealing with poverty and not much has changed the baseline.

As we have moved technologically into an age were “6 degrees of separation” is actually much smaller than 6 degrees, and we can see visually by video-images the day to day effect of hunger, shelter instability, and all the manifestations of poverty. As a global society, we still are unable to address or mitigate the problems to any large extent.

A macroscopic view of the condition can be seen in the SARS-CoV-2 global response.

  • HIP-RIP-LOVID vs STOP THE PLANES

The economic and political forces that drive the COVID response also drives the responses to poverty. 15,000,000 deaths from COVID so far (WHO 04/18/2022). Using COVID Deaths as a metric for what is tolerated in society, it is clear that the Hot Potato isn’t getting cooked regularly anytime soon. In fact, as my postings on the Bank of Mom and Dad (1) indicate, that’s 15Million less potatoes to share and 15Million more potatoes to put in someone else’s market basket. It is also clear, that those 15 Million potatoes aren’t getting distributed to the survivors, they are being stacked up in digital warehouses and stored off-site, off shore, uneaten.

Cold Potato Storage

===

1) The posts on the Bank of Mom and Dad maybe found in the archives or on the wayback machine.

Clive Robinson April 25, 2022 4:37 AM

@ Winter, Grima Squeakersen, JonKnowsNothing, SpaceLifeForm, ALL,

I always find it heartbreaking to hear stories of people not being able to cook a meal while living in one of the richer countries of the world.

The simple fact is as the old joke about a “5h1t Sandwich” has it, the more bread you have the less unpleasentness you get to eat. Or that’s the way certain people want it to be…

And that is a problem because that unsavory ethos spreads out in the civil society around it. That is the more wealth in an area the more likely you are to be kept away from the basics of life by social preasure expressed as a physical control, you don’t control, but have to pay rent to use.

You are more likely to stave to death on the streets of a city in the first world than you are on the dirt path of a village in the third world. A simple and verifiable fact that is deliberately kept from most by the “Guard Labour” of the tangible –police– and intangible –MSM– on behalf of politicians and those who fund them.

I have some knowledge of this from my youth having been in quite a few places around the world. Of those where even good clean dirt was a scarcity and raw sewerage more drinkable than the “water” in the rivers, the worst of it is almost always on the fringe of the affluent.

It once struck me oh getting into five decades ago how ironic the closeness of affluent to effluent[1], and nothing has improved in the Affluent West First World. In fact it has got so bad that the legislators have made access to water illegal unless through “approved routes”. That is in many places the water that falls on your roof or land is not natures gift to you, it is now owned by law and you have to pay to have it taken from you, and pay again to receive it back chemically adulterated from a tap…

When I was quite young back when I was in my first decade and like many possesed of too much curious energy. I was sent for the summer to relatives that owned a dairy farm where like a farm dog my energy could be expended in many ways quite often usefully. A curious place as it still grew it’s own feed for the cattle. It was in a part of Britain where even the busy roads between towns were not paved or tar’d. There was no infrastructure bringing in water, electricity or gas, but there was the all important life line of a phone. The water came from two places, that collected from the roof and stored in stone tanks and wooden barrels known at water-butts, and from a stream that also got stored in different tanks. The first “for inside” the second “for outside” it took me a little while to realise it ment “of people” not “of dwellings” or buildings.

Water was almost almost never drunk, it was “tea or beer” or if lucky “fruit juice” that got diluted with water from the kitchen jug. That held the rain water that had been boiled the day before in the tank that was part of the range that heated the farm house, and also cooled in the kitchen providing overnight warmth from what was in effect “storage heating” of necessity for cooking and the like. There was even an “ice house” that had a “root celler” that also kept the dairy and pantry cool.

To a currious six year old this was endlessly fascinating, as was the turning of a couple of pigs from contented friendly field creatures –turning over a field for roots with their snouts and the like– to sausages, pudings, joints, chops, bacon and hams and the absolutly vital lards. An anatomy lesson on an artisan industrial scale. Followed by more chemistry lessons in the kitchen where gelatin and similar were extracted and prepared for storage, and jonts were salted in trays (dry) or barrels (brine) and hung in the “wood chimney”[2] to “smoke cure” or apple tree to “air cure”. Then there was the dairy where milk became cream, cheese and much else and where I was shown the secret of making “casein” a form of plastic that was useful. Then there was the making of beer and cider, the former I can take or leave, the latter a later savour in life especially scrumpy. Then there was the making of other preserves, like jam that got cooked then “bottled” or “canned” to fill a pantry to fed twenty or more for a year or more.

But I learnt as much again when wearing the green about surviving in places the First World has made barren or destroyed. Food in jars and cans is “cooked” and usually safe to eat even when years old, just as is cold but nutritious. If you want the food hot use a “water bath” then you have hot water to make a brew and wash with, or fill an improvised hot water bottle (metal or plastic water bottle wrapped in a towel keeps your maggot/sack warm and clean water to drink). A water bath can be heated with a candle if you know what you are doing or some other concentrated source of heat. Making a hobo stove or rocket stove or even Dakota fire pit is easy when you know how. Importantly they make little stray light or smoke to give your position away to unaided eyes. But as importantly they burn fuel efficiently and will heat a water bath made from a mess tin, metal jug, deep plate, or if you know the trick a china plate, clay pot, or tile with a wet cloth / newspaper on top and a plastic cup that would otherwise melt or burn with direct heat. The use of heat diffusers from flame to hot-plate is a skill to learn, as is learning about cooking in a double boiler using a cauldron and proving and baking bread in a dutch oven, and in more modern times how a “preasure cooker” and “hay box” work and how to improvise the latter from a cardboard box, sack and duvet/maggot).

One trick to always remember is an electric iron for clothes if turned upside down becomes a “hot plate” on which you can heat a water bath. You can make with a pair of sturdy pliers frames out of metal coat hangers to make “holders” for the water bath over a candle etc or hold an upside down electric clothes iron stable. With a bit of practice and thinking you can make those frames foldable so they will sit flat in your mess tin or pie plate etc.

But the most important piece of equipment you have, that you always carry with you and does not weigh heavy on your pack straps is “Knowledge and Experience”. As a young child my curiosity gave me life lessons that are now instinctively part of me. It’s been noted by supposed “superiors” I would “spring into action” and was always “comfortable in a hole” if “left to it” and that others around me would likewise be comfortable. Much to their constination I rarely gave orders, I asked nicely and things happened as if by magic, apparently not “the military way”… So I got moved sidways to the “awkward squad” where “officers feared to tred” but apparent miracles happened.

The reality of I guess a “misspent youth” as a very young child, where curiosity got me into more trouble than any decent person would expect but also got me out again. Yes I had two feet, and I could stand on them, but why do so when you can run, dance, climb trees and mountains?

[1] Wordsmiths will tell you the roots of both words are exactly the same, that is a flow of a body of water as a stream into or out of a larger body of water. Over time one meaning sweet and life bringing, the other foul and life terminating, much like the Doctor and Undertaker winds in Jamaica the notion also applies to air streams. Add a little more time and one gets abstracted to mean via raw materials wealth that is concentrated, the other via usage and soilage waste that likewise is concentrated… Few realise it but at one time “sweet water” was a commodity of extream value and worth much more than comparably worthless gold. One was life the other became eventually under the hand of man enduring beauty it’s value in the “work” of art not the soft metal. Back then savage murders, wars and other atrocities were carried out over the control of “sweet water”. In the last two centuries or so that has changed to the flow of energy[3], but we have “eaten through that” and now the wealthy are buying up “water rights” again. Those living in California know where that will go as they are starting to live it… The funny thing is the daughter of the film mogul who brought 007 to the screen Barbara Broccoli, who has carried it on, is well aware of this issue. Which is why one of the more recent Bond Movies is all about the control of water rights. Much as an earlier one was about the control of news media, and another about creating a scarcity of silicon chips…

[2] The farmhouse had several chimneys, in fact you could say it was built between them, and they were the main structural element. You used them as “thermal mass storage heating” that you had fires in during the day and the heat absorbed by the stone radiated out into the rooms over night. The kitchen chimney was never used for food preservation as it was a toxic coal chimney. Coal had replaced wood as the main source of energy for cooking[3] but it’s smoke had a bitter nasty taste that was known to “kill things” which was why “coal-tars” ended up in many soaps and ointments as what we now call anti-biotics were yet to be “scientifically” discovered. Wood smoke from a low temprature smolder had wonderfull smells and the smoke tasted delightful when used to preserve, meat, cheese and some fruits and vegetables. Hence the chimney that had the “smoker boxes” and hangers was from a small wood fire that was warm but never hot.

[3] Coal had become the dominant energy source in homes over the Victorian and Edwardian eras. In part due to it’s energy density but later due to practical chemistry. It arived either directly in sacks or via “town gas” or both. It was called “town gas” because it needed a town to justify the cost of a “gas-works” or “coke-works”. It was made from “coking” coal which was effectively a cooking process in it’s own right. The coal delivered often by river or rail was heated in a sealed process now known as “gassification” where the carbon monoxide and hydrogen, were almost by-products to the valuable tars and similar that were “scrubbed” from it. The resulting gas was piped to housing and street lighting and the high carbon result “coke” as it could burn at very intense heat and could “reduce oxide” to industry and steel making.

JonKnowsNothing April 25, 2022 8:35 AM

@ Clive, @ Winter, Grima Squeakersen, SpaceLifeForm, ALL

re: Losing the Old Paths

A timely discussion with an old friend, covered some of the same topics that Clive mentioned. It’s a loss of Know How. But the loss has been accelerated by a social compact that “do it our way is better”. Yet we can plainly see that is isn’t better for the most part and for the majority of people. This process robs or short circuits options to do it differently. There isn’t really any reason to do that but it falls under the “If We Don’t Say You Can then You Cannot” reason.

For some years I’ve been attempting to build a small cottage and climate appropriate dwelling. The project got stuck and I don’t think it will happen in my residual lifetime but at least I made the builder sit with me and design something that will be standard soon enough. The primary impediment to completion is financing, as such a project costs more (per sq ft) due to the none standard features and there is a limitation on obtaining finances for that same reason: no one does it that way (yet).(1)

But what is so terribly different?

It’s a small cottage and is designed using new materials but piggy backs on old tech, ancient tech. It’s really an old fashioned idea. It incorporates things that were common decades ago but now are rarely seen in modern buildings. It jars the modern concept of what a house is and what it needs to have and what it needs to provide.

Being nearly older than dirt, I remember The Kitchen on the farms. Everything happened in the Kitchen unless someone important, like the Preacher, came to pay a visit, and then they got to sit in the cold parlor if they arrived unannounced. If we knew in advance of their visit, the stove or fire place would have been lit to warm up the room before they came.

So my cottage main room is the kitchen. It’s designed to warm the house in winter and the solar layout and passive building design is meant to keep it cooler in the summer.

===

1) The financing needed is 1/2 the cost of the average house being built in this area. Even with luxury add-ons it wouldn’t be much more than that.

Clive Robinson April 25, 2022 9:38 AM

@ JonKnowsNothing,

The financing needed is 1/2 the cost of the average house being built in this area.

Whilst that may be true that is of no interest to a finance company.

They look at it another way.

They look at the design and their assessor “guesses” at the recovery value should you not pay. If they think they can not get twice –or more– what they are going to loan you, then they won’t lend.

That is the way they work at the moment… Give it a couple of years and they might crush your hand shaking on a deal… You never know with people that finance real estate builds.

A while back a friend wanted to build a Swedish Flat Pack House (no Ikea jokes please). Nobody would touch them, so they finally spent I guess the equivalent of $20,000 redesigning getting drawings etc for a lot more expensive ~3time the price “brick build” and started looking to get finance. Only to be told there was no money for brick-builds as it was all “geen financing” for “eco friendly” builds… Of which that Swedish Flat Pack was just about the top of the list… All they had to do was dig out the old drawings and slap a double garage on with some extra solar cells on the roof…

No matter what you get told, house financing is based on the buyers market. If your house is a unique design your chance of getting finance is not good unless it’s been on some TV Show or won an award or preferably both.

Turn that “open plan kitchen” into an “open plan art studio” or some such on the drawing titles and you never know they might see it differently even though it’s not.

JonKnowsNothing April 25, 2022 2:35 PM

@Clive @All

re: Financing

This is an excellent point and one few folks understand. The bank or financing company is in business to make as much PROFIT as possible. They have 2 avenues of profit: Lending and Foreclosure.

We already saw the first rounds of Foreclosure Profit ~2008. It’s coming around again, more heavily stealthed by financial reports but its seeping up.

The other is in Lending, which is where one typically thinks Financial institutions make their money. They make their money on Interest and not on the Principle. The Principle or the amount you borrow gates how much interest they can earn. As, Clive noted, if you don’t borrow enough or for long enough term or for high enough rate, you won’t get the project financed.

So, comparing my project to a nearby commercial home construction project is a no brainer for the bank/finance company. Why use their principle, to finance a small project when they can leverage out a huge mega project with guaranteed (or nearly so) fast returns?

My project would return $X in 10-15-20 years (depending on terms, rates and principle borrowed). A huge mega project with 700 houses @ $700,000 USD starting price (1) which later will top out at $1,000,000 or more towards the end of the project, will run 2-4 years for last build out. Along each “phase” the cash flow returns to the financing company come in with a hefty profit because short term lending on massive scales functions like a “pay day loan” the daily rate is small but the annual rate is huge.

So, in 3-4 months the financial institutions can make 10x 100x 1,000x more than my project will bring.

The other impediment is one of regulation both legal rules and business rules. This is a long topic but in short. Not all houses can be financed because some houses are not defined under the proper regulations to qualify for a particular type of financing. There are many types of potential houses, as Clive noted like the IKEA Flat Pack House, but in USA+California+Region/County+City these have to fit with in a defined “Building Code Ordinance”. Not only must they fit into State Building Codes there has to be a matching Financial Rule for that housing type.

An example is a popular optional quick house for an extra bedroom, home-cottage, or a rental called a TinyHouseOnWheels. There are two types defined: TinyHouseOnWHeels (THOW) and ParkModelRV(PMRV). These are 2 completely separate definitions and while the house type is nearly identical, legally and code wise they are not. Financial institutions may lend on a PMRV (similar to a travel trailer loan) but not on a THOW. Building ordinances in the county prohibit THOW but PMRVs may get an OK (note MAY). However, in the City of Fresno, THOW are OK and PMRVs maybe treated the same way.

What’s the difference?

The building codes used to construct the 2 units. They both have a chassis, wheels, are towable (to some degree), contain the same sorts of sinks, washer+dryers, toilet and showers. They cost about the same too ($60,000+ as starters). For building codes they are a universe apart and the same for Financial Institutions.

===

1) $700,000 USD is the base starting price of that project. They build these first to comply with State “reduced market rate” housing requirements. So these are the discounted houses. Once the builder completes the required number of builds, all the future builds will be the much bigger price tag. Of the lots already built in this project, I’d guesstimate that 80%+ are sold and occupied. The housing might not be occupied by the buyer, the housing maybe used for rentals.

JonKnowsNothing April 25, 2022 2:56 PM

@George

re: Not materially different than what Musk is trying to do to Twitter

From the MSM articles I’ve read, Musk is planning much more damage than his “free-er speech nonsense”.

He has gained enough cash, from several “weird” stock dealing and COVID profiteering, that he claims to be able to fund most of the deal from pocket change.

The other 1/3 is coming from “leveraging the assets of Twitter”. That means when the deal goes through, which is will since he has 100% of the financing needed, the chain saws will be out and Musk+Co will be harvesting anything of value and cutting all costs to make the deal look better on the books.

It’s a corporate raid.

The only interesting difference is that beside some tech equipment (most likely leased or rent and out of date), there isn’t any “tangible asset”. There aren’t enough physical hard assets to sell off to cover that kind of investment. If there was, other corporate raiders would have jumped on them long ago.

So what is it that Musk wants? Most likely an ego boost at the expense of the employees working there, soon to be former employees.

The chain saw doesn’t happen right off, but with the kind of financial overhead it won’t be too long.

It will be interesting to see what sort of backlash or frontwash will occur after ward.

===

note: Mega takeovers, mergers and other massive failed acquisitions were predicated on there actually being something of value in the exchange: Inventory, Cash, IP, Tech, Patents etc. The courts are still flooded with buyer’s regret law suits.

Blaziken April 25, 2022 8:48 PM

Why is this being characterised as theft? Anything which is not strictly prohibited is allowed, so the attacker was simply following the rules which were put in place to obtain an advantage. I see parallels with some tax laws.

We should see this cryptocurrency as a high-stakes bug bounty program.

Clive Robinson April 25, 2022 9:41 PM

@ Blaziken, ALL,

Anything which is not strictly prohibited is allowed,

Is one legal –permiso– view point, which gives one end of the spectrum.

With,

Anything which is not strictly allowed is prohibited

Is the other legal –non permiso– view point, giving the other end of the spectrum.

The first is seen as broadly the “English or Commonwealth System” the second as the “Catholic/Continental System”.

The English system is favoured by WASP nations where Democracy has in the past been more prevelant and power less centralized. With the second by Orthodox Catholic Monarchist messianic leader nations where Autocracy / Fascism was very much more prevelant. Russia currently being de facto one such heavily non-permiso nation, where central authority is jealously guarded.

FRANCIS L MAYER April 26, 2022 3:58 AM

Cryptocurrencies have many disadvantages and Cybersecurity implementation flaws are just some of them.
This article “Major Disadvantages Of Cryptocurrencies” that I found lists considerable points of concern for Cryptocurrencies that are multi-dimensional REFER TO URL https://www.finance-monthly.com/2021/06/major-disadvantages-of-cryptocurrencies/ QUOTE from article ” speed of a transaction is another critical point at which cryptocurrencies cannot compete with players like Mastercard and VISA” and the lists goes one.

David May 16, 2022 2:24 AM

The speed of processing has made it easier to exploits flaws successfully, both in speed of attack and the getaway, with stolen assets rapidly crossing jurisdictional boundaries. Coupled with the diversity and complexity of systems, the opportunities for attacks that exploit the system rather than a weakness in an individual component have increased. The law enforcement and judicial systems that are still based on political boundaries are currently too slow to catch criminals and restoring assets is becoming increasingly difficult. Throw into the mix some jurisdictions that commit crimes or provide safe havens for criminals then I can only see clever thefts becoming more and more common. After all, how much effort would you put in to earn £182 million dollars?

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