Random notes from podcasts, YouTube, tweets, and books

Here are notes in no particular order and with no particular focus, just random things I’ve learned and wanted to share, from all the content I’ve recently consumed.

—

David Perell with the mind bombs:

Ken McElroy on the Peak Prosperity podcast

  • Property taxes will rise; low hanging fruit and much needed revenue for cash-strapped governments
  • Plenty of opportunities during this recession: Airbnb and Uber were started in the last one
  • Believes campus real estate will be a great investment once universities begin to shutter or reduce their footprint

From the book Nature’s Mutiny:
The improvisational, free form of the essay, which Montaigne invented for himself, was the ideal vehicle for observations not only of the world around him but also of himself and his own thoughts, without pressing them into a fixed system or any grand thesis. For Montaigne, good questions were more important than good answers, and he was mainly interested in describing and understanding the fabric of his own life. “It is many years ago,” he wrote, “that I set myself as the only goal of my thinking and that I am not looking at anything or investigating anything but myself.”

I started using Quad9 as my primary DNS after reading this article:
The total winner of this test is Quad9. Blocking 96% of everything I tested in this review. All 12 phishing domains where block and only one malware domain did it let go through. Very impressive results!

Paul Stamets’s amazing YouTube talk on mycology and mushrooms:

  • Largest organism in world is mycelial network in E Oregon, 200 acres, 1 cell layer thick
  • Fungi generate soil
  • Stoned Apes theory: pre Homo sapiens 200k-2m years ago wandered plains hunting, found psychedelic mushrooms in poop of large mammals / prey, ate them, and stimulated neurogenesis
  • Takes psychedelic mushrooms 1-2x each year
  • Lions mane – stops / slows dementia, promotes neurogenesis
  • Interestingly low dose psilocybin led to faster behavior change in mice than high dose (the behavior change was to dissociate bells from shocks, to remove a learned fear response

From the BBC on why and how people disappear in Japan and start new lives:
In Japan, these people are sometimes referred to as “jouhatsu”. That’s the Japanese word for “evaporation”, but it also refers to people who vanish on purpose into thin air, and continue to conceal their whereabouts – potentially for years, even decades.

And finally, a great presentation for interested newbies on machine learning and the algorithms behind it.

—

…all mistakes mine! Til the next notes update!

Dieter Ram’s 10 principles for good design

Lately I have been trying to share interesting lists / frameworks that are like training wheels for fast learning. Here is a Ray Dalio example. I refer to these lists often in my anki practice.

Dieter’s 10 design principles are taken from a speech he gave in New York in 1976. You can tell he reduced and reduced his decades of learning until what remained were truly the concentrated principles of an incredible career designing for iconic brands (like Braun, which later influenced Apple and in particular, Jony Ive) and contributing to famous movements (like Bauhaus and the Ulm School).

—

Dieter Ram – 10 principles for good design

1. Good design is innovative

2. Good design makes a product useful

3. Good design is aesthetic

4. Good design makes a product understandable

5. Good design is unobtrusive

6. Good design is honest

7. Good design is long-lasting

8. Good design is thorough down to the last detail

9. Good design is environmentally friendly

10. Good design is as little design as possible

—

You could go through and replace every [Good design] with a [Good work] or a [Good thinking] and the principles remain powerful. I love the repetitive structure too.

A beautiful translation of a beautiful Du Fu (杜甫) poem

All credit to Simon Sarris who first shared this and (I presume) translated it:

Where to Live by Du Fu

West of the Flower Washing Stream,
not far downstream from the bridge,
the master has chosen a quiet spot
here in the woods by the river.

Living apart from the city crowds,
the world loosens its grip;
murmuring of this clear water dissolves
the sadness that burdens a stranger.

Countless dragonflies play in the air,
dancing up and down;
a pair of wild ducks out in the stream
swim and dive together.

You could take a boat downstream,
thousands of miles to the east­
or else forget the boat, and live
here by this stream forever.

And here’s the original Chinese:

卜居 – 杜甫

浣花溪水水西头
主人为卜林塘幽

已知出郭少尘事
更有澄江销客忧

无数蜻蜓齐上下
一双鸂鶒对沉浮

东行万里堪乘兴
须向山阴上小舟

Ray Dalio’s Economic Machine: 3 Forces Driving the Economy and 3 Rules of Thumb for Policymakers

First, please watch this 30 minute economics masterclass from one of the great hedge funders, Ray Dalio:

Ray believes there are 3 primary forces driving our global economy:

1. Productivity growth (how much more output can you get with the same or fewer inputs)

2. Short-term debt cycle (lasts 5-8 years)

3. Long-term debt cycle (lasts 75-100 years and is usually quite painful)

In the video’s conclusion, Ray offers 3 rules of thumb for policymakers and economists:

1. Don’t have debt rise faster than income

2. Don’t have income rise faster than productivity

3. Do all that you can to raise your productivity. That’s what matters most

Unfortunately, Ray believes we are at the end of a long-term debt cycle. If he’s right, this would mean many years of economic pain, which could come in forms such as: falling real estate and stock prices; inflation via Central Bank money printing; little-to-no real GDP growth; social disorder; austerity measures in the form of higher taxes and reduced public spending.

IANAE, just studied it in college!

My complete and messy notes below:

3 forces driving economy
1. productivity growth
2. short term debt cycle
3. long term debt cycle

Economy is sum of the transactions that make it up
Money + credit = Total spending
Total spending drives economy

Market = All buyers and sellers making transactions

Biggest buyer and seller is the federal government which is 2 parts:
1. Central Government
2. Central Bank (different because it controls amount of money and credit in economy); performs this function through two means
a. Interest rates
b. Printing money

CREDIT
Most important part of economy and least understood
Largest and most volatile part
Buyers and sellers = transactions
Lenders and borrowers = credit

Any two people can create credit out of thin air
As soon as credit is created, it creates debt
Debt is both an asset and a liability

When a borrower receives credit, they increase spending
Spending drives economy
Credit worthy borrower has a) ability to repay (eg, high income), and b) collateral if he can’t (eg, a house)

CYCLES
Productivity growth = GDP growth over time
Doesn’t fluctuate much..but Debt does

Debt occurs in cycles
Short term cycle = 5-8 years
Long term cycle = 75-100 years

Changes in productivity / GDP growth are usually driven by amount of credit
“Because we borrow, we have cycles”; due to human nature
Borrowing pulls spending forward, borrow from your future self
Any time you borrow, you create a cycle

Money vs Credit
Money is instant settlement of a transaction
Credit is starting a bar tab, a future promise

Most of what we call money is actually credit
Total US credit is 50T
Total US money is 3T

Let’s say you earn 100K, you borrow 10K on credit, now you can spend 110K, so someone is earning 110K, so he can borrow 11K on credit, and so on

Borrowing creates cycles, if it goes up, eventually comes down

Short term debt cycle – 5-8 years
1. Expansion – spending increases, prices rise, this causes inflation
2. Central Bank doesn’t want too much inflation, so it raises interest rates
3. With higher rates, fewer people can borrow, debt payments rise
4. Spending and prices go down, we have a recession
5. Central Bank lowers rates, debt payments reduced, cycle begins again

Over long period of time, debt raises faster than incomes, which causes:

Long term debt cycle – 75-100 years
1. Incomes rising, assets rise, it’s a boom; Debt:income rises (debt burden)
2. Over decades, debt burdens keep rising, debt repayments start rising faster than incomes, and then incomes start to go down, borrowing goes down
3. Cycle reverses itself, long term debt peak

US, Europe, this happened in 2008, Japan in 1989, and US in 1929

Begins DELEVERAGING
Incomes fall
Credit disappears
Asset prices drop
Stock market crashes
Real estate market tanks

But now lowering interest rates doesn’t work, they’re already low, so the stimulus ends
Rates hit 0% in 1930s and 2008

What do you do?
Debt burdens too high, must come down. 4 ways

1. Cut spending, aka “austerity”, this can lead to Depression

2. Reduce debt, this can lead to deflation

3. Central government redistributes wealth, governments raise taxes on rich, social disorder can break out

4. Central Bank prints money (especially when rates are already zero), this is inflationary, uses it to buy financial asset and government bonds
US did this in 1930s and 2008, so did other countries
only helps those who own financial assets
buys bonds, lends money to government, who then distributes to people

These 4 happened in every modern history deleveraging

Depression is when people realize much of their wealth…isn’t really there

Deflationary and Inflationary ways must be balanced

Can be beautiful Deleveraging:
Debts decline relative to income
Real economic growth is positive
Inflation isn’t a problem

Will printing money raise inflation? It won’t if it offsets credit

Printing money can be abused because it’s so easy
Key is to avoid unacceptably high inflation

Takes a decade for “Reflation” / “Lost Decade” of this deleveraging

3 rules of thumb:
1. Don’t have debt rise faster than income
2. Don’t have income rise faster than productivity
3. Do all that you can to raise your productivity, that’s what matters most

Highlights from The Book of Satoshi

Phil Champagne does a great job of collecting, organizing, and providing context for all of Satoshi’s known public writing. Here are some of my favorite excerpts from the book. Amazon link.

The below are copied verbatim from the book. I may have mistakenly attributed some things to Satoshi that were actually Phil’s own words. Hopefully nothing major!

Highlights:

For greater privacy, it’s best to use bitcoin addresses only once. You can change addresses as often as you want…

Those coins can never be recovered, and the total circulation is less. Since the effective circulation is reduced, all the remaining coins are worth slightly more. It’s the opposite of when a government prints money and the value of existing money goes down.

“natural deflation”… I like that name for it. Yes, there will be natural deflation due to payment mistakes and lost data. Coin creation will eventually get slow enough that it is exceeded by natural deflation and we’ll have net deflation.

In the absence of a market to establish the price, NewLibertyStandard’s estimate based on production cost is a good guess and a helpful service (thanks). The price of any commodity tends to gravitate toward the production cost. If the price is below cost, then production slows down. If the price is above cost, profit can be made by generating and selling more. At the same time, the increased production would increase the difficulty, pushing the cost of generating towards the price.

One argument is that anyone who chooses to generate coins is actually making the choice to purchase bitcoins with electricity/computational resources, and that because some/ many people are in fact making that choice, bitcoins have at least that much “value” to the generators, who can be assumed to be maximizing their utility.

It’s hard to imagine the Internet getting segmented airtight. It would have to be a country deliberately and totally cutting itself off from the rest of the world. Any node with access to both sides would automatically flow the block chain over, such as someone getting around the blockade with a dial-up modem or sat-phone. It would only take one node to do it. Anyone who wants to keep doing business would be motivated.

I anticipate there will never be more than 100K nodes, probably less. It will reach an equilibrium where it’s not worth it for more nodes to join in. The rest will be lightweight clients, which could be millions.

I think the traditional qualifications for money were written with the assumption that there are so many competing objects in the world that are scarce, an object with the automatic bootstrap of intrinsic value will surely win out over those without intrinsic value. But if there were nothing in the world with intrinsic value that could be used as money, only scarce but no intrinsic value, I think people would still take up something.

Bitcoins have no dividend or potential future dividend, therefore not like a stock. More like a collectible or commodity.

It would be unwise to have permanently recorded plaintext messages for everyone to see. It would be an accident waiting to happen. If there’s going to be a message system, it should be a separate system parallel to the bitcoin network. Messages should not be recorded in the block chain.

I wish you wouldn’t keep talking about me as a mysterious shadowy figure, the press just turns that into a pirate currency angle. Maybe instead make it about the open source project and give more credit to your dev contributors; it helps motivate them.

From the author:

One of the major benefits of such decentralized domain name servers would bypass a government attempt at disrupting Internet communications to its citizens, as we have seen occur in Egypt in 2011.

His various writings seem to indicate that he did not expect Bitcoin to take off as rapidly as it has.

From a commenter:

The real problem with the DNS system as it exists today is that somebody has to own theroot. At the end of the day, you have to trust ICANN.