Sound Money

Some people claim that crypto-currencies are sound money. However, this is simply not true.

For something to be money, it has to be a resource, and crypto is not a resource. It is a set of hard to calculate numbers, and numbers are not resources.

The reason money has to be a resource is that any currency is a claim on a resource. Unlike money, currency is simply a claim and not the resource itself. If unbacked, the claim is just that, a general claim conjured into existence from nothing. However, if a currency is backed by a resource, it is no longer a general claim, but a claim to something specific. That specific something, backing up the claim, is money.

Money is in other words the resource itself, while currency is the claim to the resource in question.

A currency backed by gold is a claim on gold. Such a currency has an infrastructure associated with it in which holders of said currency can get their money. They can hand in their currency and get gold in return.

Holders of unbacked currencies do not have such an infrastructure. They have no guaranteed way to get a specific amount of a specific resource. Instead, they must at all times convince someone else that their general claim will still be good tomorrow. Such a system is entirely faith based. It only works as long as people believe that the general claim will still be good tomorrow. However, there's no guarantee anywhere that it will in fact be so.

For money to be sound, there is an additional requirement that the resource in question must be both limited and stable, and this is where the confusion with crypto comes into play. Since a given crypto-currency is both limited and stable, the argument is that it must be sound.

But there is no limit to how many different crypto-currencies can be created, so while there might be something sound about a specific crypto-currency, there is nothing sound about crypto-currencies as a whole.

Crypto is therefore neither money nor sound. It is unbacked currency, and wholly unsound to boot.

In contrast, both gold and silver are money. They are also sound since their amounts are both limited and stable. However, of the two, gold is by far the more sound. The reason for this is that silver is easier to mine, and also used in industry.

The amount of silver available at any given time varies much more than the amount of gold. That makes gold the soundest of the two.

Gold eagle

Public Domain, Link

Crypto and Inflation

Inflation is by definition an increase in the supply of currency. Banks are therefore the main source of inflation as they are allowed to engage in fractional reserve banking, a practice in which currency is issued out of thin air.

The current system of fractional reserve banking, backed by central banks as lenders of last resort, is highly inflationary. This is evident when comparing the purchasing power of the dollar today with what it was back a hundred years ago when the current financial regime was first installed. The dollar has lost about 97 percent of its purchasing power since then.

Now, with the advent of crypto as an alternative to central bank currency, some believe that the era of inflation is over, and that we will once again see sound money return to our economy. However, there is nothing particularly sound about crypto currencies.

The main thing to keep in mind about currency is that it is a claim on a resource. This is its very purpose. What makes prices rise when a currency is inflated is the fact that more currency is making claims to resources that do not necessarily rise in abundance as quickly as the currency.

Crypto-currencies are therefore inflationary by their very nature. There is no resource tied up to a token of crypto. Rather, resources are spent producing them. It takes a lot of energy to compute a crypto-token. Yet, all that is returned to the economy is a number.

However, as long as the numbers produced are deemed more valuable than the resources spent, no price inflation results. But there is nevertheless inflation. The currency supply increases.

At the moment, crypto-tokens are deemed extremely valuable. They catch tremendous prices. People are willing to spend a lot of central bank issued fiat to get hold of these tokens.

The eagerness to convert fiat into crypto soaks up fiat. The emergence of crypto has therefore added to price stability of other goods. With crypto soaking up excess fiat, other goods and services are less affected by central bank inflation.

So, while crypto is inflationary, it is currently acting as a price stabilizer for the overall economy. However, that will reverse once people want to spend their crypto on tangible assets. With no resource tied to the crypto-tokens, prices can only go up once they start circulating in the wider economy.

Tokens, Currency and Money

If miners start issuing electronic tokens backed by their mineral reserves, and these tokens become widely accepted as payment, there will soon arise a need for standardization.

The first requirement from the public will be that token issuers will have to be audited. If the issuer of a token isn't verified by a reputable auditing firm, few if anyone will want to hold their tokens.

The next requirement will be that the tokens are standardized, so that a person can hold tokens issued by many different miners without a constant need to convert back and forth. The metric system will no doubt be the standard. Tokens will be issued in grams, kilograms and metric tonnes, depending on the mineral being tokenized.

This again, will lead to a need for further standardization. The large number of different minerals being tokenized will prompt a call for one or two particularly popular minerals to serve as the ultimate standard.

The most desirable mineral will become the ultimate standard. It will be the mineral that people are most likely to go and get from the issuer in order to hold in physical possession at home or in a bank box.

That mineral will not be iron, or nickel, nor will it be copper or oil. It will be gold, and silver will be second in line. Only factory owners will want to cash out on their iron and nickel tokens. Regular people will never do that. Where does one store a few tonnes of iron or nickel? A kilogram of gold or silver on the other hand. That's quite interesting to hold, especially if one suspects that issuers have more tokens outstanding than they have physical metal in store.

If we define money to be the most sought after resource on the planet, we can predict that gold and silver will quickly become money again if miners successfully tokenize their mineral reserves.

Tokens, Crypto and the Blockchain

As noted in an earlier post, it is the blockchain that gives crypto-currencies their utility and hence their intrinsic value. Without the blockchain, crypto would be nothing more than a number game, interesting for mathematicians, but completely useless for anything practical.

However, in combination with blockchain technology, crypto has utility. It can be traded.

The beauty of the blockchain is that it bypasses the need for a broker, and this fact has not gone unnoticed in industries that rely heavily on banks and brokers to sell their products.

The mining industry for instance do not sell their metals directly to the general public. They go through an exchange in order to sell their wares. However, this may be about to change.

Intex Resources ASA, a Norwegian mining company, has just announced that they will issue electronic tokens backed by their metal reserves.

These tokens will not be traded on an exchange, but on a blockchain platform.

Just like crypto-correncies, the asset backed tokens will completely bypass the traditional banking and brokerage industry.

If other miners catch onto this idea, traditional banking and brokerage firms may soon be completely bypassed by blockchain technology. Furthermore, asset backed tokens are going to be very reliable stores of value, because the value of a tonne of metal can be assessed much more easily than the value of a rare and unusual number, which is all that a crypto-token is.

This means that asset backed tokens can soon become a generally accepted form of money.Tokens issued by reliable companies, open to audit and public scrutiny, will be a very good alternative to fiat currencies issued by central banks.

Asset backed tokens have therefore the potential to unseat central banks as well as traditional banks and brokerage firms.

Mining companies like Intex may very well become the issuers of currencies for the 21st century.

Spanish Tax Revenues

Spain is in trouble. No matter how things pan out regarding Catalonia, Spain is going to miss out on sorely needed tax revenues.

Even if Spain succeeds in replacing the local government in Barcelona with their own bureaucrats, things will not return to the way things were.

The cat is out of the bag. Everyone in Catalonia now know that they are regarded as Spanish property. The temptation to cheat on taxes will therefore increase. Also, local enforcers of the Spanish tax regime will be inclined to close an eye towards creative accounting. They may even encourage it.

Tax evasion will increasingly be seen as resistance and even patriotism. To cheat Madrid may become as popular in Barcelona as cheating Berlin is in Athens.

Spanish bonds will suffer, as will the Euro. The revenue lost in Catalonia will have to be made up for in other places.

The Finns

Back in the 1980s, I was told a story about the Finns by a fellow Norwegian who had served time as an army officer for UN in Lebanon back in the days of the Lebanese civil war.

The Nordic UN delegations were in charge of neighboring areas, and from time to time they coordinated their operations.

For some reason, the Finnish area was always the area with the least trouble. While the Danes, Swedes and Norwegians were always having to deal with trouble, the Finns rarely had any incidents.

Full of admiration for their Nordic Neighbors to the east, the Scandinavian delegates decided that they should look closer into the routines and procedures of the Finnish officers, so they asked them for a short presentation to learn their secrets.

The Finns were all very happy to comply, and so there was a meeting set up where the Finns would tell their Scandinavian friends how they went about their work.

The meeting went well. Everyone was courteous and kind. There was coffee and cakes. But there was nothing told that could shed light on what the big secret could be. Everything was done exactly like things were done everywhere else. So why exactly was there never much trouble in the Finnish area.

"Ah!" said the Finnish officer with a big smile. "You see, we a have a long history of dealing with mischief. We have little tolerance for it. We do not engage as much in dialog as you do."

"So what exactly do you do?" asked the Scandinavian officers, eager to learn about the Finish secret.

"Well. When there's trouble of any kind, we take them outside where we ask them to dig a hole next to the road. Then we shoot them, cover the hole, and that's it. Problem solved."

The Scandinavians looked in disbelief at the smiling Finnish officer. But he was not kidding. That was how they dealt with mischief, and that was the reason they had so little of it.

Beware Modern Day Serfdom

A few years back, I read the following story from Norway:

In the village of Balestrand, a historic hotel was running at a loss. Realizing that it would never return a profit to the owner, he decided to close it down for good.

The owner expected, rather naively, that the municipality would see the hotel as worthless as it actually was and therefore relieve him of the property tax.

However, the officials at the town hall saw things differently. The hotel was still worth a small fortune, and the owner would have to pay up, despite having closed the place down.

The owner tried then to sell the hotel, but there was no offers. He tried to give it away, but there was still no offers.

Seeing that the hotel was as worthless as he had claimed, he asked permission to tear it down. But that option was denied to him.

He asked if he could have his name removed from the records, but that was of course impossible. The hotel had to have an owner. It could not be returned to nature, as it were. Being a historic hotel, it would require maintenance as well. People from the town hall would routinely inspect the hotel and demand repairs to be done.

For the owner to deny any of this, would result in a stiff fine.

For all practical purposes, the owner of the hotel was the municipality's serf. He was bound to his hotel, and could not escape.

I found the story ominous. It was strangely reminiscent of the introduction of serfdom by the Romans back in Roman times.

Index Investing

Now is probably not a very good time to go all in on the stock market. However, for those who cannot resist the temptation, index investment is the way to go because stock market indexes will do better than the market.

This may sound strange, because indexes are supposed to reflect the market. If the stock market indexes are doing well, then the market is doing well. Right?

Wrong. Precisely because the indexes are perceived to reflect the overall market, indexes will do better than the market. Remember, central banks are directly interfering in the stock market. Their main reason for doing so is to make the market look good. What better way to do so than to buy a few stocks that weigh heavily in some index?

Central banks typically focus on a few shares to do their manipulation. We can therefore gamble and try to guess which shares they are buying. However, to be on the safe side, buying a passive index is the best strategy. It's also likely to do better than many fear in the coming downturn.

When the market heads down, central banks will make sure the downturn looks as moderate as possible. Their interference will weigh heavily in favour of the index investor.

By Vlad Lazarenko - Own work, CC BY-SA 3.0, Link

The Dept Trap

Very few people had debt a century ago. There were some with credit at the local store, and there were entrepreneurs with credit at the local bank. Those were the two groups of people with debt.

Today, just about everyone has debt. Students have debt. Houses are paid for by debt. Cars too are paid for in this way.

The thinking is that since money keeps loosing its purchasing power, keeping money in the bank makes no sense. Debt on the other hand is a great deal because it keeps loosing its value. Why work for something that inflation will pay down on its own.

The only problem, of course, is that interest rates may one day go up, and price inflation may stop.

If that should happen, everyone with debt will find their debt becoming increasingly difficult to pay, while their assets remain steady or fall in price. Negative equity will become the norm.

The problem with debt is that it is often perceived as free money. The only part that needs to be paid in full is the interest rate. The debt itself will be taken care of by inflation.

And truth is, this has been the case the last 35 years. Interest rates have fallen while asset prices have gone up. This gigantic free ride for anyone with the courage to put themselves in debt in order to secure assets for themselves, has lead to where we are today.

However, this trend is about to turn, if it has not already done so. Interest rates are going to go up, and asset prices are going to go down. For the vast majority of people, this will be a disaster.

Only net savers will benefit. Debt is going to make slaves of everyone except savers, and the only way to remedy this will be for central banks to ramp up their money creation. But that will not solve the problem. It will only give passing relief to the debtor at the expense of the saver, and since the saver is free to move into gold at any time, that's where the saver will go for relief.

The debtor will suffer, either through ever increasing interest rates, or through price inflation in everyday goods and services. Only those with skilled labor to offer, or savings in gold, will get out of a storm like that relatively unscathed.

Gold eagle

Public Domain, Link

Value, Price and Time

Value and price is not the same thing.

Value is what we subjectively think that something is worth. Price is what we have to pay in order to get it.

Only things that we value higher than its price should be worthy of our money. However, making a good judgement of value is sometimes extremely difficult.

Especially big things, complex things and abstract things are hard to value. As a result, it's easy to pay way more for something than it turns out to be worth with the benefit of hindsight.

Making it all even more difficult is the fact that money itself has become an abstraction. It used to be directly convertible to gold. Nowadays it is something fleeting that looses purchasing power over time.

However, everything can be made easier by translating it into time. We can adopt a time standard for ourselves and make judgments based on that. Our time can again be translated into gold, which then serves as a monetary standard for our lives.

From an earlier post, we got that 1 day of work should equal about 4 grams of gold. A house should equal about 2400 grams of gold.

By this standard, both gold and houses are a little expensive compared to what the typical middle class salary is in Portugal. However, relative to salaries in Norway, gold is reasonable while houses are expensive.

Other places, a nice little house may cost less than 2400 grams, making them cheap if salaries are at 4 grams per day.

The ultimate yardstick is time.

By linking time to gold and to a house, we get a way to judge the relative price of gold and houses. However, absolute prices can only be calculated from time. But since time isn't an asset class, we cannot invest in it. We can only invest in whatever we deem cheapest relative to other asset classes.

The fact that just about everything is expensive these days relative to our time does not help. We have to place our savings somewhere.

Outside of gold and houses, there is cash, shares and bonds.

Cash may do well for a while in an environment where everything looks expansive. However, cash these days is funny money. It is created out of thin air. It is linked to debt. It is complex and unpredictable, heavily manipulated by central bankers. Gold is therefore preferable for the long term.

Bonds and shares should yield about 6% in direct dividend to be of interest. This should be in addition to price inflation. At present, we're below 0% when taking price increases on food and energy into account.

The only reason bonds and shares have done so well over the last ten years or so is that interest rates have been manipulated lower by central bankers. Based on direct yield, shares and bonds are terrible investments.

Cash, gold and real estate are therefore preferable to stocks and bonds, especially in this late stage of the current business cycle.

However, there are no cheap assets. The average person has to work extra long hours these days to gather enough savings to go off with a pension in the future, regardless of which asset class is chosen.

Labor is in other words cheap. Everything else is expensive.

This situation is not likely to last for much longer, though. Too many people have left the work force. Labor is becoming scarce. Prices for skilled labor cannot stay suppressed for much longer.

When the price of labor goes up, all assets will fall relative to it. However, the assets that are closest to their fair value are likely to do relatively better. It will be bond prices that will go down the most, followed by share prices.

In such a situation, it is best to get out of cash, since this is likely to become excessively manipulated by central banks, panicking. Gold on the other hand, cannot be manipulated to the same extent by central banks.

The price of gold is ultimately set by the average middle class person buying jewelry. It is the ultimate money for this reason. Everyone values it. The price will therefore always lay somewhere between 1 and 5 gram for a day of skilled labor. As the price of skilled labor rises, so will the price of gold.

The Bouncing Electron

In the Velcro Universe, atomic nuclei have electrons bouncing off of their surface. The reason for this is that it seemed the only way to reconcile the strict particle model with observed facts.

From studying the atom, it is clear that electrons exist in discrete energy levels. An electron has either one energy level, or another. It does not posses intermediate energy levels.

This hints at some sort of harmonic resonance.

Niels Bohr suggested in his time that the electron may itself be resonating, and that the resonance of the electron would have to be in direct proportion to the size of the nucleus.

However, that would allow the electron to be anywhere at any time as long as it was at the correct distance from the nucleus. That turned out to be wrong.

Molecular bindings suggest that electrons exist in certain regions relative to each other. If there are more than one electrons in a shell, they tend to stay away from each other. They are not all over the place. They are much more likely to be found in one place rather than another place.

From this, quantum physics arrived at a probabilistic model of the electron which worked so well that molecular bindings could be computed and predicted.

The conclusion was that electrons exist as probabilistic entities.

However, there is another interpretation that would yield the same result, namely the bouncing electron.

The nucleus of an atom would in this model serve as a bouncing ball with specific harmonics. That would explain the discrete energy levels.

The mutual repulsion of the electrons would explain why they occupy separate regions.

The fact that all of this happens semi-random and at a tremendous speed explains why probability theory works so well.

In short, all that's suggested in the Velcro universe is that rather than treating the electron as a semi-mysterious entity with strange probabilistic attributes, we should think of the electron as a real particle trapped by the electric field of the nucleus, bouncing furiously off of it, always at some harmonic frequency relative to the size of the nucleus.

Nucleus with ten bouncing electrons = Neon

Funny Money

I recently sold my house in Norway. I did not want to do that, but the there was no other way. The taxman kept hiking the rent. It was becoming impossible to keep up.

However, it was not a bad time to sell the house. I got a full 16,000 gram of gold for it.

I wasn't paid in gold of course. I was paid in Norwegian Krone.

Still, it was an insane amount of money for a modest house, and the question that springs to mind is why anyone would be willing to pay that much for it. We are talking 20 years of savings, at least.

The only answer I can think of is that the house was in fact paid for in NOK, rather than gold. Everyone knows that the Norwegian Krone has lost 99% of its purchasing power over the last 50 years or so, and this was calculated into the price.

The assumption is that the NOK will fall a further 99% over the coming 50 years.

The assumed inflation over the next 50 years was brought forward into the calculation of the price.

However, the error in this is that the inflation has not already occurred. It's still in the future. As a seller, I am free to convert the NOKs that I got into gold, and that what I've done. After paying down my debts and setting aside some money for near term consumption, I've converted the rest of all the funny money into real money. In this way, I've locked the transaction into the present. Future changes in the purchasing power of the Norwegian Krone makes no difference to me.

No mater how one looks at it, the purchaser of my house, paid 16,000 gram of gold for my house.

He may of course still be right. Inflation may reduce his debt burden substantially. However, that relief is not going to come out of my pockets. Relative to gold, house prices in Norway are almost certainly going to go down.

A Gold Ring, a House and a Bitcoin

I put a gold ring on a table. It is a nice fat one. 4 grams of pure gold.

How many hours would you be willing to work in order to get it?

It fits your finger perfectly. It's shiny and impressive looking. Working a day in order to get it doesn't sound all that bad.

A day it is. 4 grams of gold is equal to 1 day of your time.

Across the street, there is a house for sale. It is a beautiful little hose. Just the right size. Neither too big nor too small.

How many days would you be willing to work for it?

Building it from scratch would take about a year with continuous work being done by on average 1 person busy at all times. In addition, there's the materials and the land.

2 years of work in order to get it sounds reasonable. After all, you get to live in it while you work for it, and it is a truly beautiful and comfortable house.

To make things easy for ourselves, we equate a year to 300 days. 2 years are then 600 days.

One day is 4 grams of gold. That makes a house worth 2400 grams of gold.

In all of this, we have to remember that we have other things we have to pay while we work to get these things, so the actual time spent will be longer. It is our savings that we put into the house, not our total earnings. 1 day of work for a ring is therefore likely to take about 1 week, and 2 years will take about 10 years.

The point in all of this is that we can estimate a reasonable relationship between a gold ring and a house.

Today, a typical house costs more like 4000 gram of gold than than 2400. Our subjective valuation tells us then that houses are expensive relative to gold. However, we may be wrong. Other people are clearly of a different opinion.

Nevertheless, there's definitely a relationship between gold and a house. What exactly people are willing to pay for either is constantly varying, but the price relationship will be inside a predictable range. A typical house will never cost 100,000 gram of gold, nor will it ever fall much below 2400 gram.

The reason for this is that both the gold ring and the house can be tied to how we value our time.

Now, let me introduce you to a rare and wonderful number. It is unique, and it can be traded, either in its entirety, or as a fraction. Every transaction is secured by a technology called the block-chain.

How many hours are we willing to work for such a number?

The rational answer to this appears to be zero. After all, a number has no value. It cannot be worn, nor can it be lived in. However, there is value in the block-chain. The transaction mechanism looks promising.

But what is the transaction mechanism worth? It is open source code. Anyone can set up their own block-chain mechanism. That requires some computers and network access. It requires some software that people can download to their PCs. That's it.

The total investment required to put together a block-chain technology is about equal to that of a house. If there are 120,000 tokens in the system. Each has a value of about 1/50 of a gram according to our own measures arrived at for the proper value of a house.

As it happens, there is currently about 16,000,000 Bitcoins currently in circulation. Each one of them are priced at 50 gold rings. People are currently willing to spend 200 gram of gold on something that we would subjectively estimate to have a value of about 1/50,000 gram. That's a mismatch of about 10,000,000 to 1.

The Bond Bouble

Government bonds have been in a bull market for 35 years. However, the bull run that started in 1980 is now almost certainly over, and we are heading into a bear market that is likely to last some 20 years or so.

Last time the bond market was in a beer market was from 1960 to 1980. During that time, gold did tremendously well, and it is reasonable to expect this to happen again this time. However, don't expect a spectacular run on gold any time soon. Quite a few other things will do just as well as gold, if not better, in the years to come. That is, before the final leg of the bond bear market where gold will go parabolic.

With central banks eager to prop up "confidence" in the economy, they will not let stocks and real estate down. They will interfere directly in the markets to ensure that prices of these assets stay high.

This is already happening. There's no secret that the Swiz National Bank owns shares in companies like Apple. Nor is it a secret that the Chinese Central Bank is an active "investor" in Chinese real estate.

Central banks that used to prop up "confidence" in the market through the purchase of bonds will increasingly do so through direct purchase of stocks and real estate. The reason for this is that the bond market has become too big for them to control. All the money they pushed into that bubble has made it extremely difficult to inflate further. Direct interference is much more efficient.

This means that we will see interest rates increasing over the years to come. Interest rates in the double digits some 10 to 15 years from now is quite likely. However, real estate and shares will continue to rise as if by magic, and we will see some very strange things happening.

We will see companies with sky high valuations collapsing suddenly, practically over night. This already happened to Toys R Us. It will be increasingly common in the future. The reason for this is that pricing of stocks will have very little to do with their actual value. Completely insolvent companies will be valued as if they were healthy and debt free.

In some cases, central banks may decide to rescue a company that they are invested in by buying their debt. The Bank of Japan did this with a Steel producer the other day, and it will become increasingly common to see this kind of rescue operations in the future.

Which companies get bailed out and which won't will be fairly arbitrary, but a general rule will be that the big ones get the bail while the small ones go down.

This will lead to a zombie economy in which huge corporations continue to operate despite running at a loss. A general impoverishment of the population will be the result. There will be no wage growth, yet interest rates will continue to go up.

The average person will have to sell their house and other assets to the central banks in order to make ends meet.

This in turn will lead to price deflation on all goods not invested in by central banks. Overcapacity of industry combined with an increase in interest rates will force prices to go down.

However, at some point, central banks will no longer be able to prop up the zombie economy. Insolvencies will result in defaults.

Seeing that shares and real estate prices go to zero practically over night, people will pull out of these markets. Liquidity will be let loose on the rest of the economy as if someone opened a flood gate, and we will see prices of commodities taking off.

Everything will suddenly become expensive, except for the things that central banks have been propping up. Food and everyday necessities will go straight up in price together with gold and silver, while everything else comes crashing down.

In the medium term, staying in stocks and real estate will remain a good position. Cash will do rather well too. Gold on the other hand may under-perform these asset classes for a while before spiking towards the end of the bear market in bonds.

Relative to bonds, everything will go up. The biggest looser in all of this will be the ones holding bonds. That is the pension funds and the like who have most of their assets in the perceived safe haven of government "securities".

The Wisdom of a Pirate

There is a popular character in Norwegian children's culture called Captain Saber Tooth.

He is a fierce pirate, always looking for the treasure that constantly eludes him. At the very last moment, just when he thinks that the treasure will finally be his, a bunch of kids snatch the treasure right out of his grasp trough some clever trickery.

The story always ends up with Captain Sabre Tooth having to go back to his ship with no treasure and no honor. However, the kids love him.

The reason for his popularity has confused many, especially those believing that children naturally detest violent and evil characters. What exactly do kids see in Captain Sabre Tooth that makes him so popular? After all, he's in the end nothing but a failed middle aged guy. What's so fantastic about that?

The answer may lie in his attitude and desire for success.

A song that he keeps singing along with his men as they head out to find the treasure goes like this:

"Hey, ho, the treasure will soon be ours. When it is, we will relax, for at least a hundred years."

What's interesting to note is that Captain Sabre Tooth is willing to take a lot of risk in order to take no risk in the future.

There is no risk associated with a chest full of gold. The value of such a treasure is apparent to even the youngest children. With a chest of gold, you're basically set for life.

The message to young children, boys in particular, is that we should take some risks early in life in order to take less risk later. Young men should invest their energy in adventures that pay off in the form of gold. By middle age, they should have amassed a treasure large enough to keep them going for the rest of their lives.

This is exactly the sort of thing that stories like Iron John suggests. Take risk, invest the proceeds into safer assets, put the proceeds of this in turn into gold.

A young man's energy and hard work should be focused towards the future with the ultimate goal to amass a treasure large enough to sustain him and his family for the rest of his life.

This is so simple to understand that every child gets it. Yet, what do we see in today's world? People are making increasingly risky bets on the stock market and hyped up fads like crypto-currencies.

Some are now even selling their homes in order to speculate in crypto-currencies. This is madness. It is the opposite of what a sane person would do. The trend should be from risk towards safety, not the other way around.

Neutral Particles in Magnetic Fields

The Velcro universe has a tiny imbalance due to positive charges being slightly more reactive than negative charges. This imbalance can be used to explain why the proton is so much bigger than the electron, why neutral atoms combine into molecules, and why gravity is a universally attracting force.

In a dialog with Dustin Wilde on Facebook yesterday, another thing came to mind regarding the imbalances of the universe. This time regarding spiraling motions.

The imbalance in the Velcro universe would make neutral particles behave as if they were ever so slightly charged with respect to a magnetic field. They would bend off as if they were negatively charged by a minuscule amount.

The reason for this is that the photon in the Velcro universe consists of two orbs spinning in opposite direction. When polarized so that photons all spin the same way along the same axis, we get magnetism.

This makes positive charge bend off in one direction and negative charge bend off in the opposite direction when moving through a magnetic field. Magnetic fields act like charge separators in this respect.

Neutral particles are unaffected by magnetic fields. Except, in a large enough field, the imbalance in reactivity between the positive and negative orbs of photons would come into play. Over a huge distance, a neutral particle will be pulled to the side by the positive orbs of spinning photons slightly more than it is pulled to the side by the negative orbs.

In this way, everything that moves through a magnetic field, bends off to the side. Charged particles bend off a lot. The effect is easy to detect.

Neutral particles bend off a tiny bit. This would only be detectable in huge fields. However, it would affect every neutral particle, including neutrinos.

From this, we get that everything bends off to the side when moving through a magnetic field. The only exception would be a neutrino that happens to be positively charged by the exact amount required to counterbalance the effect of the spinning orbs of photons. For all practical purposes, such neutrinos don't exist.

The imbalance inherent in the Velcro universe can therefore be used to explain why everything bends off to the side as it moves. Everywhere, there is electricity, everywhere there is magnetism, and everything that moves bend off to the side when moving through a magnetic field. Therefore, everything spirals.

When Two Things are Closely Related

Some things are so closely related that we think of them as one and the same. The classic example of this in physics are the two phenomena of inertia and gravity.

It is well known that gravity is directly related to inertia. The more inertia an object has, the more it weighs. There is no exception to this rule.

From this, we've come to think of inertia and gravity as two sides of the same thing, namely mass.

However, there is no such thing as mass. It is merely a convenient label for the two phenomena that we call inertia and gravity.

If we smash an atom to bits, we won't find a single particle that is responsible for mass. All we'll find is a bunch of short lived charged particles that quickly join up with other particles to form new stable configurations.

What binds inertia and gravity together isn't some abstract phenomenon called mass. Rather, it is the size of particles. The larger a particle is, the more inertia it has. Also, the larger a particle has, the more gravity it produces.

Inertia and gravity are two completely different phenomena that happen to share a common origin, namely the size of the particles from which they originate.

Another connection that has been made is the joining of time and space into a single thing called space-time. This too is an error in thinking.

While it is true that time and distance are related, it is wrong to assume that the two are a single thing.

The fact that the fancy geometry derived from the space-time idea adds up correctly, doesn't necessarily make it true. The exact same results can be arrived at through a much simpler model in which time and distance are related trough the size of particles and the speed of light.

A time unit is simply the time that it takes for a photon to cross a given distance.

Distance is defined in terms of particle size, and time is defined in terms of particle size divided by speed.

Again, we have two completely different phenomena that happen to share a common origin. Distance is related to the size of particles. Time is related to the size of particles and the speed of light. That does not make them one and the same. It merely makes them related despite being very different.

Photon traversing an electron

Why Quantum Field Theory is Wrong

Quantum theory was onto something when it was all about particles interacting directly with each other. However, they took a wrong turn somewhere and ended up with quantum field theory which is demonstrably nonsense.

The wrong turn was made when they embraced the idea that particles could be more than one place at once. They came up with this idea to explain the double-slit experiment, and ended up with Schrödinger's cat.

Had they stayed with a strict particle model, they would have avoided this embarrassing turn. However, people like Niels Bohr could not resist the paradox. To him and many others with him, it sounds like profound knowledge to declare that the sub-atomic is somehow unrelated to common sense.

This is a common mistake by intellectuals. They often fall into the trap of thinking that complexity and paradox is somehow superior to simplicity and common sense.

So, what started out as a simple and elegant theory became a beacon of mathemagical nonsense. Everything became waves and energies, quite the opposite of what the subatomic really is.

This nonsense culminated in the prediction that space contains an infinite energy which is nevertheless zero, the so called zero-point energy.

Having dropped the particle model in favor of waves and energies, the logical consequence of just about anything is that there must be an infinity of it. After all, there is an infinite number of mathematical points possible in a void. A void would therefore contain an infinite amount of energy.

The fact that they ended up with this result should have been a big aha moment for them. It's clearly wrong. Any theory that ends up with an infinity of anything should be rejected. However, this finding was simply added to their long list of "profound" insights.

In a strict particle model, none of the above nonsense is possible. Particles are discrete quanta with a finite size. Everything becomes in this manner finite. The problems of quantum field theory solves themselves if they would only be willing to reject the crazy idea that waves and energy is somehow possible in a void.

In fact, as demonstrated in the chapter in my book on light traveling through a transparent medium, no waves are needed. With energy stored in particles as size, waves disappear from particle physics, and energies becomes a property of particles.

Quantum field theory got everything the wrong way. Particles are not an illusion produced by energy and waves. Particles are real, voids filled with nothing but waves and energies are the illusions.

Niels Bohr

By The American Institute of Physics credits the photo [1] to AB Lagrelius & Westphal, which is the Swedish company used by the Nobel Foundation for most photos of its book series Les Prix Nobel. - Niels Bohr's Nobel Prize biography, from 1922, Public Domain, Link

My Unemployed Friend

I live in Portugal.

There are a lot of bars and cafes in this country. I don't know why. It's just the way it is. Culture I guess.

Walking my son to school in the morning, we pass about ten bars and cafes all together. That's a lot for a ten minute walk.

Some of the bars have a regular clientele. I recognize many of them on my way. They are always sitting in the same place, having the same drink and snack as always.

One of these guys like to sit on a bench outside, smoking a cigarette. He's a young man. Not very bright by the look of him. But what do I know. He might be a genius. I wouldn't bet on it though.

Since my son and I keep walking past this guy, we've come to greet him whenever we see him. The usual "good morning", "good day" thing we do here in Portugal.

I've noticed that he sometimes run errands for the bar owner. Every now and again he's busy helping out with something.

There's plenty of little things that need to be done, and this guy seems to be helping out whenever there is a minor task to be done. He's there when the bar opens, and I guess he's there when they close too.

I don't think he's employed by the bar owner, though.

The thing is. Portugal has a minimum wage law. The bar owner would have to pay much more than the guy is worth if he were to employ him, so I guess they have come to some other arrangement.

My guess is that the guy gets a few free beers and maybe some left over food to take with him home at the end of the day. He might even get a little cash in hand whenever he does something particularly useful.

That's how it is to be at the bottom of the income ladder. A formal work contract is only for higher value workers. The low income guys have to work without a contract. Alternatively, they have to stay at home with mother, drawing minimum benefits from the state.

That's just the way it is.

Work promotes confidence

By Federal Art Project - This image is available from the United States Library of Congress's Prints and Photographs division under the digital ID cph.3b48918. This tag does not indicate the copyright status of the attached work. A normal copyright tag is still required. See Commons:Licensing for more information., Public Domain, Link

The Prince

I have always liked the use of archetypes in stories. It simplifies and clarifies what's being said.

A prince, for instance, is a young man with integrity and a fortune of some kind. A knight is the same character, but in armor and ready for a fight. The knight may not have a fortune to draw on, but will no doubt amass one in due time.

The prince and the knight are young men of character. They are the young versions of kings.

Princesses are young women, also with integrity. They may or may not have a fortune to draw on. However, in due time, they become queens. They are the young women who will be good wives for the princes and knights.

For some reason, there is a lack of princes and knights these days. At least, that's my theory regarding the increasing rate of suicides among teenage girls, and I believe the problem is caused by the gate keepers and overlords.

The gate keepers are politicians and the overlords are the bankers. They are sinister characters constantly corrupting society with their rules and fake money. They tempt and coerce young men into idleness.

The result is that the men who should have become knights and princes end up as vagabonds and clowns. They idle away their lives with trivialities. Instead of learning a trade, they stay at home playing video games. Instead of work, they spend their time and money on college degrees of no value.

Instant gratification is valued above long term planning and gains. After all, the gate keepers have promised everybody a free lunch for ever, so why plan for the future. And with hard work first being taxed and then being depreciated through inflation, who wants to save for the future?

The prince is becoming a rare specimen. It is no wonder so many princesses are depressed.

 

A young man of character

By Andrea del Castagno - The Yorck Project (2002) 10.000 Meisterwerke der Malerei (DVD-ROM), distributed by DIRECTMEDIA Publishing GmbH. ISBN: 3936122202., Public Domain, Link

Suicides Among Teenage Girls

Teenage girls and middle aged men are the two groups of people where suicides are most on the rise. If suicides among middle aged men are due to a mismatch between reality and what we are more or less hardwired to be, namely kings of our own little domains, could it be that suicides among teenage girls are similar in nature?

I'm a middle aged man, so it's easy for me to relate to the sad lot of many of my fellow men. What life is like for a teenage girl is something I can only vaguely imagine. However, using the archetype of the princess, it's relatively easy to see that it must be confusing to be a young woman in today's world.

For starters, where are all the princes and knights? Young men today are encouraged to be irresponsible and focused on satisfying immediate desires. They are not looking for a princess, but a play mate. They have no plans for the future. The state is after all going to take care of them when they grow older.

Furthermore, young women are told that they need to take care of themselves. Their future is one in which they have to work for a boss. A relationship with a young man would be something that comes in addition. There is no economic sense in getting married. It's a frivolous luxury.

But this is not at all what a young woman is hardwired to desire. A princess is supposed to meet a prince. She marries him, gets a small estate from her father, the king, and sets about her life as a wife, a mother, and an investor. Together with her prince, she becomes queen and her husband becomes king.

None of this is possible for the average young woman today. Middle aged men are by and large broke. There is no small estate to hand over to their princesses. Besides, there are no princes. Even if the young woman was to get a small estate, who is she going to share it with? The future that a young woman can look forward to is one in which she may remain an undiscovered Cinderella for her entire life, working for a boss without ever meeting a prince.

A relationship with a man would be a frivolous luxury bearing little relation to her intuitive notion of a good relationship. Young women are not naturally frivolous. They want to be ladies. They desire a prince. But their father, the king, is broke. There are no princes. The future is bleak, looking nothing like what most young women would naturally desire.

Cinderella

By Sarah Noble Ives - https://www.americanantiquarian.org/AabMcL53.htm, Public Domain, Link

The Wife

A good spouse is paramount when it comes to our happiness and chance of success in life. A spendthrift spouse can ruin even the richest. A nagging spouse can make life miserable. A divorce can be a disaster both financially and emotionally.

On the other hand, a good spouse can be a valuable asset, and the very backbone of our success.

Yet, in these confused times, very few men know what a good wife is. Anyone tolerably sexy will do. If you're rich, you can afford an even sexier one. That's about the depth of the wisdom circulating these days.

But choosing a wife is about much more than just finding a sexy woman who's fun to be with. It is about future success as well.

In addition to being sexy and fun, a good wife is a constructive and independent woman. She is thrifty and concerned about money matters. She listens to her husband. She speaks freely about her opinions, but lets him do what he considers best for himself.

A healthy relationship is always between two independent people. The wife is the queen and the man is the king. They own their own stuff. They rule their respective domains. They do not interfere in each other's businesses. They cooperate and share their opinions. That's it.

The idea that one has to make the other happy in order to be a good spouse is wrong. No one can make another person happy. All we can do, is to be supportive of the other. Apart from that, happiness is something that each has to make for him or herself.

The idea that blind passion and the feeling of being inseparable from one another is a great starting point for a lasting relationship is nothing but a popular myth. Such feelings are usually due to some deep seated insecurity and desire to meddle in other people's life. It's a huge mistake to think that such feelings can form the foundation of a healthy relationship.

The focus on passion and romantic materialism, so predominant in popular culture, is confusing people. We are constantly told that passions have to be high all the time, and that materialism in the form of luxuries of all kinds are the true ways to happiness, and it is making us all miserable. Try to live that way, and poverty and misery will ensue. We are not made to live such hectic lives, nor do anyone but the super rich have the means to pursue such misery.

The man who marries a woman with the idea that he will make her happy through romance and materialism will almost certainly fail. On the other hand, a man that marries a strong, independent woman, who's goal is to make herself happy through a relationship with a man who she will support as a friend and a mistress, will find success and happiness.

A clear separation of domains, and a genuine desire to cooperate rather than meddle in each other's affairs forms the foundation from which a long and happy relationship can grow.

By Edmund Leighton - http://www.illusionsgallery.com/Signing-register.html, Public Domain, Link

Suicides Among Middle Aged Men

Middle aged men are committing suicide at an increasing rate, and no-one knows why. However, it does not require any deep insight into the male psyche to see that society as it is presently arranged is no place for old men.

Ancient stories about men and their lives tell us what is apparent to any male as he grows older. The best rendition of this is in the famous story about Iron John as recorded by the Grimm brothers.

In this story, we learn that a man's psyche does not reach full maturity before middle age. By middle age, he is no longer the risk seeking young prince, and he is long past the stage where he was dependent on his mother. He is king of whatever domain he has been able to gather for himself.

However, an ever increasing number of middle aged men have no savings. They have no domain over which they can rule.

Furthermore, middle aged men are not much valued in the work force. Many loose their jobs. Unable to find income and with no savings, they are forced to move back in with their aging parents.

This is in stark contrast to what men are hard wired to be at the time of full maturity. It violates their sense of dignity. It is right out demeaning for a man to find himself still dependent on his mother at the age of fifty.

The rising rate of suicides among middle aged men is therefore no big mystery. However, it raises the question as to how this situation could have come about in the first place. Why is it that middle aged men of today end up poor and dependent on their parents?

The answer to this can be found in the political system of our times. We are told from an early age that the state will take care of us as we grow older. This is extremely comforting for the young prince as he heads out into the world. He does not have to be too worried about failure. He can take big risks. He can even spend it all in the moment.

Seeking out a spouse for himself, the young prince is free to spend more and take bigger risks than he would otherwise do. Mostly unaware of what it means to be a king, as that stage of maturity is far into the future, the prince remains reckless and a spend thrift for years. When full maturity hits, he is stunned and confused. He had no idea what it would entail.

Sorely lacking in savings, the budding king decides to make up for the slack by engaging in even riskier behavior. He has to become rich over night. He has no time to waste. A frenzy of wild speculations ensues, and the result of this is usually ruin.

Think of all the hyped companies and investment bubbles that we have seen over the last century or so. The men who invest their savings in the hype of the day are most likely the paupers of tomorrow.

Buying individual stocks and other trendy investment vehicles is a sure way to ruin. The fact that these things are doing so well at the moment is a sign of desperation, not health.

It is the desperate middle aged man hoping for a final break and payout that is fueling the current stock market and cryptocurrency bubble.

We all know that cash will never grow much in purchasing power. Quite the opposite is likely to happen as our gate keepers and overlords continue to debase the currency. There is therefore pressure on everybody to get out of cash and into something else.

The frantic desperation of the middle aged men is stoked by the political establishment and their banker overlords. It is of course evil to the core. However, there is very little we can do about this.

All we can do is to educate young men of today about the need to be prudent. They need to be told that by the time a man is fifty, they need to have plenty of savings.

Furthermore, the savings have to be in low risk things. A house to live in, cash and gold is the ideal combination. Shares and other more risky assets should be handed over to the next generation as soon as possible, and the next generation has to be told that the dividend earned from risky assets must be moved into less risky assets so that they too will be able to relax when they reach full maturity.

A king has his gold and his house. His children are is knights. It is the knights who do the risky business. They command the risky assets. The king guides the knights from a distance. He supports them with his knowledge of what it is like to be king, and he tells them what he learned as a prince.

A man's daughters are no less knights than his sons. However, a woman reaches a different kind of maturity. In addition to rule over her domain, she has to seek a suitable prince that will mature into a good king. This is a different story, and one that a woman should tell her daughter. A man can only give the male perspective. It is different. It's folly to think that we are the same in this respect.

However, one thing is clear. Few people are organized in the way described above. Men are kept from becoming kings as they are meant to be. The system is stacked heavily against the middle aged man, and this is almost certainly the true cause of the rapid increase in suicides.

But it is not impossible to create a dynasty, a kingdom consisting of a house, some gold and some risky assets spread on the children. Young men should be told of this prospect. It is a beautiful vision. It is what men will crave to be when they reach full maturity, and nothing is as satisfying as to live according to our true nature. A middle aged man, ruling his domain, having his knights spread out in the word and listening to him for advice but otherwise operating autonomously, is as happy as a man can be.

The Return to the Gold Standard

Fractional reserve banking is nothing new. It has gone on for centuries. However, it was not until the creation of central banks that this banking practice became institutionalized.

Of particular importance was the establishment of the Federal Reserve in 1913. It paved the way for the complete dismantlement of the gold standard, and the complete enslavement of all people on our planet. Every one of us are in some way paying tribute to the overlords in charge of the Federal Reserve.

It does not matter whether we are debt free or living off the grid. Every time we make a purchase of some kind, the overlords take their cut. There is no product today that does not in some way have a component that was paid for by Federal Reserve dollars. Debt to the US overlords are included in every single transaction on the planet.

This is because the US dollar has become the standard on which all trade is based. The US dollar has replaced gold as the base of international trade. Every international trade deal has become dependent on dollar reserves rather than gold reserves. Instead of gold being used to cover any trade deficit, dollars are now used.

This arrangement has served US government agents well. It has enabled them to borrow money cheaply from the Federal Reserve to spend it wherever they please on whatever they please. Countless wars have been financed this way, and the complete enslavement of the US citizen has been put into place. US bankers have become rulers of not only the US, but the entire world.

This has been allowed to happen because the USA has been a productive nation. The people of the US have therefore been the main contributors to the overlords, and the US citizens have been tolerant of the system because it was preferable to all other systems, especially the communist systems that plagued the world during the 20th century.

However, US citizens today are net debtors. They do not carry as much of the weight as they used to. The overall debt in the system has also exploded. The federal government of the US has increased its debt from 1 trillion since Ronald Reagan was president to 20 trillion today, and this is excluding promises of social security, pensions and all sorts of other liabilities.

US government officials have saddled every US citizen with a mountain of debt that they will be forced to service through taxes or inflation.

Since tax increases will burden the US citizens directly, while inflation will burden all people owning US dollars, regardless of nationality, the natural impulse by US gate keepers and overlords alike is to inflate the problem away. The political establishment will cover the bankers' backs as they print their way out of their mess.

The burden will have to be carried mainly by people living outside of the US.

However, this is not at all a welcomed move by gate keepers of other nations. They do not want to have their tax donkeys burdened by US debt, so they seek to find ways around the US dollar.

New trade agreements are now set up in which the US dollar is excluded. The agreements are set in other currencies, notably the Chinese Yuan and the Russian Ruble.

However, the Chinese and the Russians gate keepers do not trust each other. None of them want to be stuck with a bunch of cash. They want something more tangible, something that the trading partner cannot simply print up more of, and that something is gold.

This is the first step towards a gold standard, and very reminiscent of the final step we made away from the gold standard. It looks a lot like the Bretton Woods system in which gate keepers reserved the right to make transactions in gold, while keeping this privilege away from their tax donkeys.

What we are witnessing is a slow return to the gold standard. However, it is in no way a return to a true gold standard in which everyone can get gold in return for their cash. Tax donkeys have to buy their gold in an exchange. They cannot simply deliver the cash in a bank and expect the bank to hand over a fixed amount of gold in return. There is no direct link between cash and gold. The price of gold changes all the time.

However, the trend has turned. Over time, gold will become more important. The overlords will gradually loose their power to print what others have to work hard to get.

This will of course be fiercely opposed by the overlords and their gate keepers. No politician will welcome the trend reversal, and the bankers will absolutely hate it.

The Chinese and Russian gate keepers have not signed their trade deals out of love for gold, but out of a deep distrust of each other. At home, they will defend their own bankers' privilege to print. They will do everything in their power to stop their own people from becoming as independent of government agents as they themselves seek to be in relation to foreign trading partners.

But the trend has turned. Gold will be accumulated by governments and bankers. Free spirited people will realize the value of gold as they see its relentlessly rise in prize relative to cash. They will seek to own some themselves.

Gold will become the preferred asset for savers, and this trend will continue until the current fractional banking system finally implodes.

But don't hold your breath waiting for the collapse. It took more than 100 years to completely unwind the gold standard and enslave everyone on the planet. It will take just as long to unravel the mess. Gold is not a short term investment. It is not a get rich quick scheme. It is an asset for the long haul. It will steadily gain in value. It is the sort of stuff the prudent saver will prefer because it requires no maintenance, no daily monitoring of price actions, and no thinking.

The greatest beauty of gold as a savings vehicle is that it requires no time from the saver. Savers can therefore spend their time doing things that they love. It gives us agency to do stuff that we love to do.

Time is in the end the ultimate resource. Gold frees up our time from the daily chatter of news feeds so that we can pursue the things that matter to us. That in the end is the true value of gold.

Where do We Go From Here?

Fractional reserve banking allows banks to produce credit from nothing. When people borrow money, they do not get access to other people's savings. They get brand new money typed into their account by a bank clerk. When the money is paid back to the bank, it disappears. Only the interest due is retained by the bank.

In this way, money is created and destroyed through the issue and return of credit.

As things stand, hundreds of trillions of dollars have been created in this way. At one percent interest, trillions of dollars are due in interest payments every year.

The interest due is so astronomical that it has become a real strain on the economy. No more credit can be issued because no-one can afford to pay it back.

There are of course exceptions to this. Some people don't have any loans. However, these are few and far between. Most people are in debt.

Furthermore, all states have debt. With our present monetary system, there can be no money without debt, so states are in debt, partly to ensure that there is money circulating in the economy.

To finance the interest payment on their debt, states tax their people. Everybody is taxed for the privilege of having money circulating in the economy.

Some states have issued debt that run for as much as hundred years. The agents of the state have in other words decided to tax at least three future generations in order to keep the system going.

The state agents act as the gate keepers for the plantation in which every person is a slave to the banks. The banks are true masters, the privileged issuers of debt. Every man child and woman is expected to pay their due, and future generations, yet unborn have been offered as collateral.

However, the system is unsustainable. There is a limit to how much debt can be issued, and when that limit is reached, there is only interest payments. The party is over and the debt must be returned.

At this point, people will realize what sort of con game they have been lured into, and they will want to get out of it. They will start paying down on their loans, and they will find ways to avoid the taxes that everyone will know to be nothing but tribute to our banking masters.

The idea that the state is there to take care of us will die, and a general awakening will occur. People will see the tax farm for what it is, a system of free range slavery.

To get out of this mess, there are only two ways forward. We must either pay down the debt and interest, or we must let the debt evaporate through default or inflation.

As long as there is no general revolt, the next hundred years will be a century in which debt is gradually reduced. Money will be returned to the banks where it will be destroyed. The money supply will be reduced. Money will become scarce, and prices for everything will drop. We will get hundred years of deflation. Those with money in the bank and no debt will be the big winners.

However, if there is default, money will become worthless. The debt slaves will in this way be let off the hook and those with money in the bank will be the big losers.

Only as long as the current system is in place and operating as intended will money in the bank be a good position. If there is default through inflation or otherwise, the prudent saver should own assets.

However, all assets will loose out relative to cash in the event that there is no default.

What then is the correct position for the saver?

The answer is cash and gold.

Cash will do well as long as the system holds, and gold will do well if the system breaks. Furthermore, gold is a saver's asset. Very few people hold both debt and gold. This means that if the debtors of the world come under pressure, gold is not going to go down in price.

Even if the system holds, gold will do relatively well. If the system defaults, gold will do fantastic.

The prudent saver should therefore have both cash and gold: Gold for the long haul and cash for the shorter term.

The slave master's fort

By AgnosticPreachersKid - Own work, CC BY-SA 3.0, Link

Fluid Dynamics

A video posted by my Facebook friend Rudy Maldonado combined with a comment about fluid dynamics posted by Freddie Thornton made me realize that the zero-point particles described in The Velcro Universe will in fact behave like a fluid.

The short video on how to make sand behave like a liquid is well worth spending a minute watching. If something as coarse and heavy as sand can become this fluid by the introduction of a few air bubbles, imagine how fluid zero-point photons and neutrinos moving at the speed of light would be.

Fluid dynamics may well be the best way to model the behavior of zero-point particles. Forces can then be understood as variations in density.

Without being in any way an expert on fluid dynamics, I can easily see how the mechanism described for forces in The Velcro Universe can be translated directly into this kind of physics. The over-pressures and under-pressures described in my book, translate directly into high and low pressure areas.

The mystery of action at a distance is easily explained in terms of fluid dynamics. The ether, which I call zero-point particles, acts like a perfect fluid with high pressure and low pressure areas located in between charged bodies as well as massive bodies.

Human History

There are quite a few strange things to be noted about relatively resent times. How for instance were people able to build with such enormous blocks of rock as they did? Why did they choose to use enormous blocks of rock to build foundations of buildings? In what way was that a practical solution?

A building project is always a compromise between the practical and the impressive. It is therefore interesting to note the enormity of the blocks chosen. Ancient buildings were impressive for sure, but hardly practical. Unless of course, gravity and possibly even the hardness of rocks were different in the past.

It also appears that ancient civilizations were able to pour rock as we pour concrete today. Why did a simple technology like that suddenly vanish?

The time scale of human history makes it improbable that gravity was much lower in the past. It seems strange too, that chemistry may have been different. However, there is nothing to suggest that ancient people were particularly sophisticated. Their art was crude compared to more recent cultures like the Greeks and the Romans. They may have had some surprisingly fancy gadgets, like the light tubes that are pictured on Egyptian wall paintings. But there is nothing to suggest anything super advanced going on. The very pictures depicting the light tubes suggest to us that the culture was relatively primitive.

Everything points to a change in gravity and chemistry. But the time scale is wrong. This cannot be explained using conventional dating. There is a puzzle here that has yet to be solved.

The Expanding Earth

Our planet is expanding. The evidence for this is quite overwhelming, and covered extensively in The Gravity Mystery. It is backed up by solid evidence and years of research by people like James Maxlow.

However, the relationship between the expansion and gravity is less clear. There is little evidence for any substantial amount of space dust falling onto our planet, and the expansion is coming from deep inside our planet. Even if there was a lot of space dust falling onto Earth, it would have to find its way deep into the crust in order to produce the observed effect.

The conclusion drawn from The Velcro Universe is that the expansion is only indirectly related to an increase in gravity.

The main reason for an increase in gravity is the fact that protons grow bigger over time. This in itself has nothing to do with the expansion. Bigger protons does not equate bigger atoms. The observed expansion is not directly related to mass condensation, but internal electric pressure.

A strong positive charge at the center of our planet has caused it to crack and expand. This in turn increases its capacitance and charge, which in turn increases the pressure. Once started, the expansion of a planet will accelerate, and our planet is no exception.

This makes our planet bigger without adding any mass. Earth is swelling up like a balloon, which in itself would reduces surface gravity. The expansion is not in itself related to an increase in gravity. On the contrary, it reduces surface gravity.

However, the increased capacitance due to the expansion has the effect of adding charge to our planet. This increases gravity, and is especially noticeable in areas where the crust of our planet is thinner than average. Such areas have stronger than average gravity.

Indirectly, gravity increases due to expansion. But only because of the increase in charge. The main driver for the increase is most likely mass condensation.

The Velcro Universe does not provide a simple model relating expansion directly to an increase in gravity. Rather, it paints a more complex picture. However, this is not a problem. Evidence from the fossil records indicate that gravity increases in fits and starts. A complex relationship makes therefore more sense than some cosmic law or constant.

We are dealing with mass condensation which depends heavily on the availability of high energy photons, and we are dealing with capacitance and charge which depend on geological conditions and sun cycles.

Far from being a simple process following some smooth mathematical curve, the expansion and the increase in gravity follow a random pattern that happens to fit rather well to an overall logarithmic trend.

Earth expansion seen from the south pole

Mass Extinctions

From studying fossil records, two things become clear. First and foremost of these is that Earth is periodically hit by mass extinction events that wipe out a large percentage of animal and plant species.

Secondly, it is clear that the maximum size of animals and plants has become smaller over time. We do not have brontosaurus size animals roaming our forests, nor do we have ferns the size of palm trees.

There is no controversy in this. The data is clear. However, there is plenty of controversy as to the true nature of the mass extinctions and what exactly is behind the steady decline of the maximum size of animals.

Some think that mass extinctions happen virtually over night, while others believe them to have taken as much as a million years to complete.

The decline in maximum size of animals is usually attributed to anything but gravity, which for some reason is assumed to be a constant. However, the most obvious and immediate answer to why there are no brontosaurus size animals on our planet today is that gravity must have increased.

My personal conclusion is that mass extinctions happen in a series of rapid steps, and that an increase in gravity prevents the surviving species from producing animals and plants as large as the was previously possible.

Were anyone to resurrect the Quetzalcoatlus (a flying dinosaur the size of a giraffe) today, the poor thing would not survive for long. It would not fly. It would hardly be able to move. Long before reaching adulthood, the animal would succumb to gravity.

The sudden disappearance of the Woolly Mammoth, Sabre Tiger and other large animals some 10000 years ago is proof that extinctions are rapid when they happen. However, recent extinction events have not all happened at once. The Elephant Bird on Madagascar died out as recently as in the 17th century. The Haast Eagle and the Moa on New Zealand died out in the 14th century, and there were Woolly Mammoths still in existence 4000 years ago.

In the space of some 10000 years, a large number of species have disappeared. In geological time, this is but a wink of the eye, and so we can conclude that we are in fact living in the middle of an extinction event comparable to the two big ones that happened earlier.

There is no reason to believe that the extinction of the dinosaurs some 60 million years ago was any more dramatic than the extinction event that we are presently in. Nor is there any reason to suspect that the really big extinction event that happened some 300 million years ago was all that dramatic either, despite wiping out as much as 90 percent of all animals then living.

However, we will not speculate as to the exact nature of the extinction events. The focus of this book is not to settle any discussion on this, but to look closer at the extinction events to see what we might learn from them regarding gravity.

In that respect, it is of particular interest to note that it was not first and foremost the size of the animals some 300 years ago that differed from the animals that disappeared some 60 million years ago. It was their general size and type that differed. That's where the biggest difference lay.

300 million years ago, Earth was dominated by giant insects and lizards. There were ferns the size of trees. In the seas, there were armored sharks and fishes of all kinds.

60 million years ago, this was greatly reduced. Insects were smaller, and so were the lizards. Armored sea animals had become relatively rare.

The large animals that went extinct some 60 million years ago were different in kind from the ones that went extinct 300 million years ago. Dinosaurs were not lizards. They did not crawl with their legs out to the side. Their legs pointed down like all large land animals today. They were most likely hot blooded too, related to present day birds.

However, even the animals from 60 million years ago had features that we do not find today. Only the kangaroo has a tail as bulky as that of dinosaurs. Giraffes and elephants have tiny tails. No large animal has a massive heads relative to its body comparable to that of the Tyrannosaurus Rex or the Quetzalcoatlus. The long neck of the giraffe is nowhere as swan-like and elegant as that of a brontosaurus.

It appears that more than one thing has changed over the years. Not only has gravity increased, buoyancy and inertia has increased too.

Insects today are some 5 times smaller than they were 300 million years ago and much fewer sea animals capable of swimming carry armor. This can be attributed to a change in buoyancy of both air and water. The relatively large size of heads and tails of the dinosaurs can be attributed to a change in inertia, while the overall change in size is due to a change in gravity.

The fact that gravity, inertia and buoyancy have all changed tells us that it is not just our planet that has changed. Everything on it has changed too. We do not merely live on a planet that has become more massive, the very stuff we are made of has increased in mass too. It is the proton that has changed over time. Atoms today are heavier than they were in the past.

The Gravity Mystery

Late September 2016, I published an essay called The Gravity Mystery in which I enumerated the many strange facts I had come across related to gravity. My intention was to extract some kind of conclusion related to the true nature of this force.

This turned out to be a turning point in my thinking about gravity and physics in general. The enumeration of the many oddities, and the systematic thinking about their implications led me to conclude that gravity had to be, at least in part, related to capacitance.

This in turn led me to Morton Spears' work on gravity and his simple model of the atom, which when combined with Halton Arp's observations about quasars and their red shift, formed the basis of my discovery that all physical phenomena, including gravity, can be explained in terms of particles either joining together to form structures, or bouncing into each other to create force.

I had at last found a simple theory that could explain, not only gravity, but a whole range of other phenomena for which I had not originally sought to find a solution. This theory was laid out in The Velcro Universe, and its appendix, The Velcro Cosmos.

I can of course highly recommend my two books. However, what is often more interesting than a theory on its own, is the story behind it. A theory is merely a conclusion, often a rather personal one that a reader may not fully agree with. The facts that led to the conclusion, on the other hand, are open ended and full of intrigue. The mystery is often the best part of the story. The solution is but a interesting aside.

By Matt Martyniuk (Dinoguy2), Mark Witton and Darren Naish - Own work, CC BY 3.0, Link

Particles

The Velcro universe has four stable atomic particles, each made up of particle quanta that are either positive (hook covered), negative (hoop covered), or neutral (mix of hooks and hoops).

The atomic particles are:

• Neutrino = 1 neutral quantum
• Photon = 3 negative quanta + 3 positive quanta
• Electron = 1 positive quantum + 2 negative quanta
• Proton = 1089 positive quanta + 1088 negative quanta

All other particles are either composite arrangements in which two or more of these particles are joined to form an entity, or transient subdivisions that will immediately recombine to produce one of the stable particles mentioned above.

The Neutron is a composite particle consisting of 1 proton, 1 electron and 1 neutrino.

The positron is a transient subdivision consisting of 1 negative quantum and 2 positive quanta.

The positron will always combine with an electron to either form a photon or merge into a proton.

The predominant tendency is for positrons to merge with protons, but the process can go the other way too. Protons can eject a positron-electron pair and thereby generate a photon. However, the normal process is that photons split into a positron-electron pairs which are in turn absorbed by a proton.

The proton has for this reason a natural tendency to grow in size. Its present size is enormous compared to other particles, but will inevitably grow larger over time.

A single proton can capture a single electron and trap it in its electric field. Such a configuration is what we generally refer to as a hydrogen atom. Hydrogen atoms will readily combine with other hydrogen atoms to form hydrogen molecules (H2).

The reason for this is that molecules are more efficient in the way they store energy than single atoms. Stable molecules hold less energy in total than their constituent parts do on their own.

The more efficient the arrangement, the more readily the individual atoms will join to form it. Two water molecules, each consisting of one oxygen atom and two hydrogen atoms (H2O) are more energy efficient than two hydrogen molecules (H2) and a single oxygen molecule (O2). This is why oxygen and hydrogen readily combine to produce water.

The energy released in chemical reactions is radiated away by a transfer of energy from the atoms to nearby photons.

The net charge of an atomic nucleus determines the number of electrons that it can capture, and hence its chemical property. If an atom has fewer or more electrons than its positively charged nuclei would normally allow, it is referred to as an ion.

Ions are charged atoms. They require an electrical field in order to be maintained. Under electrically neutral conditions, atoms are neutral.

A hydrogen nucleus has a net positive charge of 1 and must therefore capture 1 electron in order to be electrically neutral.

A helium nucleus is a combination of 4 protons and 2 electrons. That gives the helium nucleus a net positive charge of 2. It must therefore capture 2 electrons to become neutral.

An oxygen nucleus consists of 16 protons and 8 electrons. It has a net charge of 8, and must therefore capture 8 electrons in its electric field to become electrically neutral.

Isotopes are atomic nuclei with a deviating number of neutrons. As stated above, neutrons are electron-proton pairs. This means that any number of these can be added to or removed from an atomic nucleus without affecting its chemical property. However, isotopes tend to be radioactive. They are therefore relatively rare.

Exotic sub-atomic particles such as Bosons, Leptons and Quarks are transient particles produced by smashing up protons. They are misinterpreted as being somehow important in physics. However, no practical application of this misguided physics has ever been realized, and all its findings are highly speculative.

The Velcro model does not support Bosons, Leptons or Quarks. What is seen in laboratory experiments are merely the scattered debris of smashed up protons which quickly recombine to produce some new combination of photons, electrons and protons.