Oswaldo Lairet

February 26, 2023

What the NYFED describes in The Bitcoin–Macro Disconnect as “Bitcoin’s price puzzling disconnect to monetary news” is coincidentally the pattern I came across in December 2022, while methodically tracing all 14 years of the BTC/USD price curve.

Though they don’t express it as clearly, what Messrs. Benigno and Rosa describe in their paper is the same marvel I happened to discover, while helping to write the 2022 annual report for a hedge fund management company I advise:

Since inception, 14 years ago, Bitcoin’s full price-cycle (peak to trough and back) has been patently agnostic to rate policy changes, liquidity events, inflation expectations, and other macroeconomic news.

So, what does this Bitcoin Chart prove?

The degree of disconnect between Bitcoin’s inbred price cyclicality versus the surrounding macroeconomic environment evidenced by Bitcoin’s 14-year price chart above, is positively mind-boggling. Not only for the FED, but for those of us who have spent decades researching financial and economic history. While pursuing a career in Treasury Operations & Trading, the heart of the banking system’s most advanced monetary-intelligence, instant vs historical data analysis, and trading-arbitrage algorithms, I never came across such a wonder.

More Stock-to-Flow, Rainbow Charts, etc., right?

From the start, I found the pattern had nothing to do with the Rainbow Charts or the Stock-to-Flow Model referenced against the Gold supply-demand curve, whose fiat price became easier for the Plunge Protection Team (PPT) to manipulate ever since Volcker began raising policy rates in the early 80s. An incentive arrangement that slowly weakened gold’s allure versus holding fiat and allowed COMEX Gold Futures to begin patently swaying Gold Spot prices.

Since then, the issuance of uncovered gold certificates by the London bullion banking establishment in coordination with G7 central banks has been fully impairing the gold-price discovery process up until the present moment.

So, when the NY FED says:

“Bitcoin shares most of the features of a store of value, such as Gold. But unlike other U.S. asset classes, Bitcoin is not affected by monetary and macroeconomic news.”

What they are not explaining is why Bitcoin is impervious to fiat manipulation. Here is how I answered that question in December, after weeks spent reconfirming the price data, crunching empirical proofs and researching all related scientific fields, until finding the biological, cultural, and economic tenets that support the thesis laid out below.

INTRINSIC VALUE derives from nothing else, but the preservation instincts that are deeply rooted in scarcity vs hoarding behavior in humans. Some of these instincts are survival traits inherited from biological evolution, others come from cultural resource competition dynamics thoroughly detailed in the post below.

Which suggests that it’s infinitely easier to game our primal instincts, than we’ve been taught, and that whoever designed the Bitcoin algorithm is acutely aware of how these preservation instincts work in humans at a collective level. Thus, while PoW‘s validation procedures make Bitcoin’s unhackable by anyone, including insiders (footnote), Halvings impose the self-reliant monetary policy (see code below) that triggers the self-preserving mechanism described above.

Changing these five lines of code would require 85% of all Bitcoin network nodes to vote against their own interest

Bitcoin’s Game Theoretical Dynamics

Activating human preservation instincts in a group, regardless of its size, that fully understands the mathematical principles sustaining Bitcoin’s immutability seems to sufficiently determine its fiat-price progression path, once it starts.

Conversely, no matter how many speculators, “crypto” schemers, and otherwise uninformed fad-seekers come and go, their participation, or lack thereof, seems to have no persistent effect over time.

In sum, Bitcoin’s long term price path seems to depend only on the collective response of a small group of investors who hold a relatively large proportion of its total issuance. A group whose high degree of technological, financial or mathematical knowledge allows it to stay fully invested, regardless of Bitcoin’s large fiat-price oscillations, or its constant exposure to political, uneducated, falsified or intentionally orchestrated mediatic attacks meant to misinform the general public and distort the average investor’s price-discovery process.

The Proof of The Pudding has a Conclusive Taste

If you split Bitcoin’s 14-year price chart into 4 lines each for the halvings (blue) & their midpoints (grey), you find that each peak to trough cycle has pivoted up or down over the same time interval between each color pair.

To visualize these dynamics I drew blue verticals for each halving date and grey ones for each midpoint date. As the chart shows, Up Legs start about two years before halvings and end about one year after them, lasting about 1000 days. That is when Down Legs start: a few months before midpoints and they end a few months after them, lasting about 400 days, Which drove me to conclude that by:

Note also that Up Legs until now, seem confined to return no higher than ~20% over the immediately previous high return, within their ~1000-day period. This has occurred persistently between the months before and after each halving. While Down Legs seem confined to a return loss no higher than 80% of the immediately previous high return, within their ~400-day period. This has also occurred persistently between the months before and after each Midpoint.

Finally, here’s why we can’t just pick and choose the last +400 Day bottom. Until the “Latest Bottom” hypothesis is proven (at the end of the present cycle), we cannot firmly establish its precise date or price. All we can do is theorize its value ex-ante (via interpolating the last two ex-post time period samples -as shown in the excel sheet below).

No alt text provided for this image
Ex-ante y and x values after line 35 are merely projections trained on the confirmed ex-post values shown above it.

In short, December 26th is not even the December price low, it results from averaging the total amount of days that elapsed as the last two ex-post lows were reached. The same goes for the price and date at the end of the dashed white lines, on the top chart. Those ex-ante y and x values are merely projections trained on the confirmed ex-post values locked on top of the partial ellipsis formed by the slope of the secants dropping off.

* BTC’s PoW turns energy into a generic entry fee to preserve miner & block-winner anonymity+unpredictability & BTC’s immunity; while turning their ASICS & all other participating nodes into a global server that can’t be rigged, monopolized or altered to hinder Bitcoin’s consensus protocol.


Since Greenspan’s 1987 FED appointment, G7 central banks began signaling an interest rate policy that visibly favored using debt, instead of cash, to promote economic growth. A monetary policy that “achieved” a trinity of incompatible goals: 1. Persistently low prices & wage inflation at the suitable expense of 2. Promoting asset-price inflation, which in turn, spurred consumption, private investment, government spending, and thus: 3. GDP growth. This led us to a “debt trap,” as debt-to-GDP ratios must climb and rates drop for GDP to grow, making it vulnerable to higher interest rates (see top chart).

This debt-driven pyramidal GDP growth scheme took $20 trillion of G7 debt to $305 trillion from 1986 to 2022. As the rollover loop grew by 1,500%, real interest rates were cut by 1,000%, from +4% to -4%, while attempts to normalize them were always retracted, as soon as higher discount rates impaired GSIB loan books upon repricing the NPV of loan collateral, whose owners could not provide the difference vs registered value.

The G7 then chose to spiral its already unsustainable rate of monetary expansion, at orders of magnitude higher speeds by injecting ~$30 trillion of fiscal and monetary stimulus into the global economy from Q1-2020 to Q4-2021, while expressly interfering with the global production process. This sent CPI to rates not seen since 1974: over 7% and PPI to over 20%. Yet, once the Ukraine war began in 2022, the G7 simultaneously stopped QE, began normalizing interest rates, and weaponized the global reserve status of the dollar by freezing Russian central bank reserves. As energy obligations force net importers to innovate or face ruin, over $5 trillion of public debt buyers have switched out of US Treasuries and into hard assets, while countries like Russia, China, and Saudi Arabia actively seek to change the existing monetary order and Bitcoin raged upwards.

Hence, as we approach, yet another monetary collapse, no time in history has been better justified than now, to hedge for a peak-volatility event, as a valuation distortion that used to happen once every 100 years until the 20th century, has arisen thrice in less than 25 years: A Stock Market P/E ratio higher than 2 standard deviations (SD) over the historical mean. In fact, as extreme Stock Market P/E ratios are a measure of the price-distortion other credit-sensitive assets, such as bonds, real estate, or commodities, experience over the same period, the world may be in for a 1929 type of outcome, the only time the P/E ratio had ever reached over 2 SD over the historical mean, before Alan Greenspan came along, as you can confirm on the chart below.

Fortunately, this time, ordinary global citizens are less vulnerable than they were in 2008.

Though presently, we are the only human cohort that has ever witnessed the existence of a non-physical, non-systemic, unsubduable asset, the surrounding power structure keeps selling us the investment model whose constituents’ Market Correlation went to 1.0 in 2008. This happened, regardless of the seemingly differentiable nature between Bonds, Stocks, and Leveraged Real Estate, because their prices fully depend on the health of the monetary system sustaining them.

That means that most investors around us are still living in a Credit Time Bomb. A systemically correlated bubble, where all asset prices are 100% dependent on the availability of unrestricted credit from an excessively leveraged and overly exhausted monetary system.


Writing and Illustration, Oswaldo Lairet

Just as the individual control of fire changed the balance of power between nature and humans, the individual control of energy to validate the monetization, transfer, and storage of value, changed the balance of power between ordinary citizens and their nation-states.The Bitcoin Power Shift


Over the past two millennia, Seigniorage, as defined below, has been every ruler’s preferred method of taxing citizens, ever since gold/silver coins became widely accepted as money. This practice became even less traceable and more profitable to rulers after the BOE began acting as England’s central bank in 1694, since paper money was easier to debase than any metal. Then, in 1971, the advent of fiat money made monetary intervention so untraceable, that except for the much faster materialization of its pernicious effects, it would require an audit to expose it. Also, by the time fiat came along, rulers had turned education and mass communication systems into persuasive linguistic devices.
Language allowed them to introduce such a high comprehension hurdle versus all matters related to money and finance, that some 99% of the population lives in a state of severe Information Asymmetry. In developed nations, this fantastic hurdle has allowed centralized economic planning to intervene every economic sector by creating imprecise and even false belief-systems, specially in finance. Through these imperceptible devices, rulers are able to indirectly tax their citizens’ income, on top of regular taxes, and in much larger amounts.
Fortunately, information symmetry and thus, self-sovereignty across centralized-interest barriers is within reach. Over the past fifty years, the invention of the microprocessor, brought us the internet, aside from exponentially higher levels of production efficiency, personal productivity, and individual connectivity. Cyberspace allowed us, not only a higher degree of intellectual independence and creative abilities, but it eventually led to the uncensorable, unbribable, and immutable “Cybercash” predicted by Davidson & Rees-Mogg, nearly 30 years ago in The Sovereign Individual. The only form of money that has been developed specifically to prevent governments from trampling on their citizen’s right to property, mobility, privacy and self-defense.

The Recurrence of Monetary Seigniorage Through the History of Civilization

For thousands of years, money has been used to facilitate exchange transactions and to transfer value between people and entities. Yet, ever since Lydia’s Croesus began stamping animal images on miniature chunks of gold and silver, 2,500 years ago, money became commonly tied to those metals . Metals stood as money, until the rise of central banks and later, fiat currency, turned money into a notional construct, whose marginal cost to reproduce makes it ideal for economic central planning.

While monetary units of one type or another have long been used as a medium of exchange, the concept of seigniorage has never changed, except in name, regardless of how internet dictionaries and investment guides now want to define it. Seigniorage has nothing to do with the “production” of anything, but monetary debasement.

Seigniorage was the difference between the alleged face value of gold or silver coins minted by monarchs and governments, versus the value of the actual amount of gold or silver the coins contained. As such, seigniorage became the ideal way for rulers to covertly capture the difference between the implied vs real value of their monetary units and funnel it toward expanding their political and personal power agendas.

Under the gold/silver standard, the price of any economic resource, should roughly equal the ratio between the total stock of existing resources versus the total stock of gold/silver in circulation. However, as seigniorage reduces the total stock of gold/silver contained in the nation’s coins in circulation, their purchasing power sinks below their face value, as the economy’s existing resources begin selling directly for gold/silver or well-recognized foreign gold/silver backed currencies.

Having arrived at the true meaning of seigniorage makes it easy to understand why modern governments make such a systematic effort to linguistically dissociate the word seigniorage from what their central banks have been doing for the past three centuries. Otherwise, from prestigious economists to political actors, academic pundits and the general citizenry would have happily avoided decades of misleading epistemological controversy and policy-setting disputes regarding what inflation is, what originates it, and whether it is actually “beneficial”!

Instead, everyone would have noticed that Inflation is just another word for plain old seigniorage. A hidden tax, imposed by governments on their citizens, that is meant to covertly capture the difference between the implied vs real value of their monetary units, and funnel it toward expanding their domestic and foreign military and political power, influencing global public opinion, and funding the power elite’s culturally biased, and recurringly apocalyptic or intimidating propaganda projects.

Yet, while the “inflation” debate continues, trillions of brand-new notional currency units get reproduced at zero marginal cost at the touch of a button, keep adding fluff to global monetary aggregates, displayed via paper or computer screens. “Fluff” keeps destroying the purchasing power of each currency unit in the hands of citizens, while diverting seigniorage gains to the power elite, just as it happened in the Middle Ages. For instance, when kings used their coins’ seigniorage profits to finance every new war against foreign, or domestic targets.

Central Banks Covertly Seize Individual Purchasing Power by Generating Inflation, While Simultaneously Driving Real Interest Rate Returns on Individual Savings Negative by Lowering Nominal Interest Rates

As established, central banks’ persistently excessive monetary printing creates an inflationary environment that leads to steadily rising prices across all goods and services. Perpetually rising prices is what ends up dissolving the purchasing power of the country’s currency and all payments coming to any citizen’s present or expected income, such as wages, rent, dividends, interest returns, etc.

However, aside from maintaining an inflationary environment, over the past forty years, central banks have driven real interest returns to zero or negative on fixed-income investments, by forcing nominal interest rates lower. This means that individuals are not only robbed of their financial investments nominal purchasing power, but their nominal returns, as they become negative, after discounting from inflation.

Meaning that, in addition to eroding the purchasing power of individual income, central banks encouraged a never-before-seen increase in the size and maturity of debt balances by creating persistent inflation, while forcing the real interest cost of borrowing to zero or negative. Knowing both factors rob ordinary citizens of their income, they simultaneously incentivized the issuance of long-term obligations to fully monetize the purchasing power and real rate return losses they suffer.

Through Persistent Inflation and Lower Interest Rates, Central Banks Promoted the Exponential Debt Growth That Has Enabled the Redistribution of Income from Individuals to the Globe’s Most Powerful Economic Agents

As chronic inflation increases purchasing-power decay over time, it encourages the issuance of longer maturity obligations, while lower nominal rates significantly reduce the real interest rate cost of borrowing, it becomes clear why Central banks engineered the exponential increase of global long-term debt of the past 40 years.

As such, what central banks have truly enabled is a nearly continuous redistribution of income from individuals across the globe to the globe’s largest and most powerful economic agents, sovereign, financial and corporate debt issuers.

Aside from this “Reverse Robin Hood” effect, Central banks have also enabled wealth concentration via the Cantillon effect. A process by which, as the first recipients of imminent policy decisions, power insiders can act in anticipation, to monetize the event, before financial markets learn of it.

As a result, the power elite continues to control most of the global wealth, while the wealth gap between it and its subjects remains the same as it has been throughout history.

Fortunately, Fifty Years After the Invention of The Computer Microchip, Its Use Has Begun to Dramatically Alter the Balance Between the Power Elite and Individual Citizens.

Since Intel invented the computer microchip in 1971, microprocessing technology began enabling individuals to access knowledge never previously available to them and executing tasks that until that point, were impossible for them to perform, due to their knowledge complexity.

Over time, as microchips miniaturized computer components and made them globally available, brand-new technologies and devices became feasible, that gradually launched exponentially higher levels of production efficiency, employee productivity, and consumer reach than was possible during the Industrial Era.

Upon these developments, the Information Age was born and began to replace the sheer industrial size and assembly-line collectives of the industrial era. It enabled the constantly expanding growth, accessibility, productivity, and use cases for microprocessor diversification, which, gradually made private assets protection easier to manage and more accessible to private individuals, while in many cases limiting the power of government extortion over them.

The Internet, for instance, has already taken on characteristics of an organic system, as foreseen by the late physicist Heinz Pagels in his visionary book, The Dreams of Reason, “I am convinced that the nations and people who master the new science of Complexity will become the economic, cultural, and political superpowers of the next century.”

Yet, the megapolitical dimensions of the change described above are so little understood, that even those who have recognized its transcendental importance, have done so in anachronistic ways.

Until January 3rd, 2009, the day the Information Age’s encryption technology made it possible to create a digital asset*, outside of the reach of state coercion, it was still difficult to fully internalize how much the technological change brought upon by the microprocessor’s cyberspace frontier will render the world’s political systems obsolete.

The 21st century’s cyber economy will be shaped by this profound change in the use of knowledge, as the algorithm that dramatically tipped the balance between extortion and protection in the direction of protection, facilitates the emergence of an independent economy, where free markets emerge as spontaneously adaptive mechanisms and not as the result of a bureaucracy’s conflicted resource allocation procedure.

Societies that reconfigure themselves to become more complex adaptive systems will indeed prosper. The more likely immediate beneficiaries of the increased complexity of social systems will be the citizens of those nations that first recognize and adopt the technology that brought upon the change in the balance of power that renders the central-control stage of human development obsolete.


As the world reaches the end of the current long-term debt cycle and commodity purchases become unaffordable, regardless of how much domestic currency or sovereign debt G-7 economies issue, the global ratio of production versus consumption is likely to reverse, with interest rates moving towards their 5% nominal geometric-mean of 5,000 years.

That will strip governments of their highly levered, iliquid, and inefficient monetary scheming. Their four decades of interest rate distortion will likely not survive the onslaught of real interest rates and truly capitalist competition… Thank goodness!

Fortunately, as humanity faces the current cycle ending, we are the first generation to have access to a monetary technology that can endure longer than ornamental rocks. Its name is Bitcoin, the only payment in specie ever invented to be impregnable to government decrees, counterfeiting, shipping blockades, or the threat of violence.

BITCOIN: An open-source, peer-to-peer network algorithm that every ten minutes, prior to registering a single accounting entry on its digital ledger, achieves simultaneous, verifiable, and irreversible consensus among its innumerable, unrelated, anonymous, and globally disseminated stakeholders. An encryption technology so advanced it allows private individuals unrestrained control and instantaneous access to their capital, while rendering it impregnable to extortion.


As the largest monetary expansion in history fails to contain the long-term debt cycle that ended in 2008 (see The 40-Year Market Distortion Unwind), while spurring unprecedented levels of moral hazard, the barely-hidden financial crisis stands as proof that Predator-Prey Resource Competition Dynamics governs mankind as it does all living things — regardless of the language constructs that power elites have been spinning over the ages. Ultimately, individual rights to property, mobility, and self-defense continue to be trampled under the 21st Century Schizoid Man’s Logic of Violence.

As the 21st Century approaches its first quarter end, it becomes ever more obvious that once the generation of US President Thomas Jefferson faded from the scene in the early 19th Century, neither “democracy” nor “individualism” had ever been truly guaranteed — and did not persist. In 1831, political philosopher Alexis de Tocqueville noted: “…having thus successively taken each member of the community in its powerful grasp and fashioned him at will, the supreme power then extends its arm over the whole community.” Two centuries later, his words resonate louder than ever to those of an independent mind, unshackled from the mainstream media.

Sadly, nearly a century before Jefferson’s monumental contribution to the world, the political-financial elite in England had already begun expanding unfunded credit cycles. Since 1694, the Bank of England (BOE) had been arbitrarily debasing its currency and expanding credit, knowing this would shock nominal prices higher. The BOE founders and their entourage quietly seized prime income-producing assets before real-economy asset-prices soared. Predictably, unlimited money expansion bumped up against physical inventory size, causing asset and commodity prices to soar — until aggregate demand collapsed and nominal prices crashed too. Regrettably, against Jefferson’s wishes, the BOE template — which bypassed democracy — was adopted in the USA, and the same happened. In fact, had it not been for the oil empire that made the US Dollar more dominant than Gold for several decades into the 20th Century, the expanding global adoption of the BOE template would long ago have taken G-7 nations to the dog-eat-dog world where Zimbabwe, Venezuela and other nations languish.

Unfortunately, the BOE template still prevails around the globe. Whatever actions are taken to neutralize it are almost always doomed to fail, as prescribed by the simplest differential equations ever devised: the Lotka–Volterra Predator-Prey equations, which prove why the linear-math models of Neoclassical Economics absolutely fail to describe the dynamics that govern human ecosystems. Only System Dynamics can fully validate the interactions that rule human economics and are intrinsic to all ecosystems (see Predator-Prey Economics). There is no better proof of this than the top chart, where the blue “Financial cycle” curve “kills” the red “Business cycle” curve, as the latter begins to dip irreversibly after 2008 — despite the titanic credit expansion by G-7 Central Banks to save Globally Systemically Important Banks (GSIBs), which have flooded the world in fiat currency and debt for the past 14 years. The GSIBs have used ploys straight out of the 1966 Report from Iron Mountain, which specifies, as a justification, using substitutes for war that must (1) be economically wasteful, (2) represent an apocalyptic threat, and (3) provide a credible excuse for making people serve the government’s will. What the “Iron Mountain” report written by James K. Galbraith and members of the think-tank predecessor of the WEF, failed to mention is that, except for scaring citizens into giving up their individual rights, wars rarely serve many other objectives. Instead, the most ruthless factions in a nation’s industrial-military complex are presented with a kaleidoscope of opportunities to encroach on the privacy and property rights of ordinary citizens for the sake of “national security.”

In conclusion, as the world reaches the end of the current long-term debt cycle and commodity purchases become unaffordable, regardless of how much domestic currency or sovereign debt G-7 economies issue, the global ratio of production versus consumption is likely to reverse, with interest rates moving towards their 5% nominal geometric-mean of 5,000 years. That will strip naked governments’ highly levered, illiquid and inefficient monetary scheming. Their four decades of interest rate distortion will likely not survive the onslaught of real interest rates and truly capitalist competition… Thank goodness!

Fortunately, as humanity faces the current cycle ending, we are the first generation to have access to a new monetary technology that can endure longer than ornamental rocks. Its name is Bitcoin, the only payment in specie ever invented to be impregnable to government decrees, counterfeiting, shipping blockades or the threat of violence.


“Gentlemen, you can’t fight in here” … After Bitcoin Replaces Fiat!

Bitcoin is the first example of a new form of life.
It lives and breathes on the internet.
It lives because it can pay people to keep it alive.
It lives because it performs a useful service that people will pay it to perform.
It lives because anyone, anywhere, can run a copy of its code.
It lives because all the running copies are constantly talking to each other.
It lives because if anyone copy is corrupted it’s discarded quickly without any fuss or muss
It lives because it’s radically transparent: anyone can see its code see exactly what it does
. Ralph Merkle

The main reason I dedicated nearly two years (2015–17) to study how Bitcoin works was an intense mix of incredulity and curiosity. It was hard to believe that a mysterious hacker had found, implemented, and abandoned! Triple-Entry Bookkeeping* (“TEB), the solution, I had found (accidentally) to Systemic Financial Risk. Or believing that, before vanishing, alias Nakamoto had left running the digital equivalent of a perpetual motion machine. Except, I had to admit that just as TEB had come along in 1989 (see bottom), microprocessors had already opened up a nonphysical reality where the absence of Newton’s “external unbalanced forces” could enable a digital perpetual motion machine to “live” on the internet, as Merkle put it. In essence, Satoshi had proven Newton right: “The laws of physics indicate that perpetual motion would occur if there were no external-unbalanced forces.”

A secondary, more mundane reason is that, although I had enough informal computer knowledge to understand the basics, it wasn’t enough to understand cryptography, without taking several months of online courses to scrutinize what Satoshi had actually achieved.

Simultaneously, I had been studying Systemic Financial Risk since 1989, when the SEC’s Paul Mulford unilaterally changed decades of FSAB regulations (and common sense) in order to allow banks to register Latin American Debt at FACE value, by just taking it out of our trading book and registering it into our maturity book (as if they were Treasury Bills or near maturity bonds).

Later, when Nicholas Brady came up with his nominal face value exchange plan (versus net present value logic), did it become clear to me why they had changed our mark-to-market rules entirely. An immoral scheme that left no doubts in my mind, that financial sector regulators were fully captured by the banking cartel, who knows since when.

Thus, Bitcoin was the first time I saw a functional application of TEB**, and since I considered it the final solution to global systemic financial risk, I had kept on searching for any meaningful implementation of it. Once I understood Bitcoin’s technological and historical significance, I could only wonder if Prof. Ijiri had ever seen his majestic invention at work, before he passed away.

To give you a sense of the vastness of information Satoshi handled better than others in many fields where they are experts, notice in the brief below, that just knowing the fundamentals of Prof. Ijiri’s invention would be a formidable feat for a non-financial professional, furthermore being so familiarized with its principles, as to be able to unequivocally encode them in an algorithm that has been flying solo, while interacting with millions of people and billions of transactions with a 99.98% uptime record for over 10 years. Let alone the depth of cybernetics know-how*** needed to master the interactions of the myriad scientific, logical, and behavioral principles that keep Bitcoin overcoming adversarial opponents of all sizes, both in the physical and digital realms, as if such an invention had already been maturing over several decades.

*I bumped into TEB in 1994, only because one of my professors (below) at Tepper School of Business (Carnegie Mellon) had invented it just 5 years earlier and nearly 500 years after Double Entry Bookkeeping.

** In Bitcoin’s case, Ian Grigg, one of the key geniuses behind the creation of the Ricardian Contract, derived the cryptographic version of TBE in 2005, by making the Bitcoin registry ledger, the third party between any two counterparts. A feat that cannot be achieved unless the ledger is immutable. That means that, unless the ledger is created with the simultaneous, secure, and irreversible block signature issuance, obtained by spending the necessary computer power to find Bitcoin Core’s unique hash vector answer to the combined hash query resulting from combining the last block’s Merkle root (summary hash signature) with the hash signatures of all verified transactions posted over the past 10 minutes.

*** To illustrate, ignoring that Bitcoin is purposefully coded in Non Turing Complete language (NTC code), doomed ETH from the start.

Oswaldo Lairet
Fund Manager & Financial Researcher

Since Triple-Entry Bookkeeping* (“TEB”) arrived in 1989, it had been expected to eradicate our financial system’s dependence on Double-Entry Bookkeeping’s unavoidable byproduct: Centralized Trust. Thus, TEB would eventually stop our global financial system’s exponentially growing degree of Systemic Risk. Surprisingly, it was not until 20 years later, when Bitcoin’s activation validated TEB, that it became widely known. Meantime, Centralized Trust reached a point beyond which, it could only subsist, under a mantle of central bank monetary maneuvers, collusive practices, and concealed gate-keeping constraints that netted a web of hidden encroachments on privately-owned financial assets. Since then, the negative gap between real and nominal global bank capitalization has been fixed by globally expanding sovereign debt and central bank balance sheets to help GSIBs’ cover their chronically deficient Loan-to-Value ratios while compressing real interest rates. A policy that, aside from conflicting with natural law, brought global Real GDP expansion to a halt.

Conversely, Bitcoin’s most transcendental innovation was to achieve simultaneous, secure, and irreversible consensus, prior to registering bookkeeping entries on a ledger, shared among innumerable, unrelated, and globally disseminated parties. In turn, Bitcoin participants receive a verified and continuously updated copy of their digital ledger that replaces every one of the constraints previously preventing them from taking full and instantaneous control of their assets, for a set of cryptographic keys that only they can access.

In this context, it becomes clear that by providing Unconstrained Access to Privately-Owned Financial Assets, what Bitcoin truly digitized and decentralized is Trust.

  • Tepper School of Business Professor of Accounting and Economics Emeritus Yuji Ijiri developed TEB in 1989 ~500 years after the mathematician, Fry Luca Pacioli formalized Double-entry bookkeeping.


“Capitalism is the only system of economics compatible with human dignity, prosperity, and liberty. To the extent we move away from that system, we empower the worst people in society to manage what they do not understand.” — Frederick Hayek

Venezuela epitomizes Hayek’s dictum. It enjoyed the world’s fourth highest per-capita income in 1961, when it established the political system that over the six following decades, it tenaciously expanded, until fully abolishing capitalism and destroying its economy. 

Visualizing how the progression from one wealth-extreme to the other happened, entails charting how each of the dominant economic regimes, before and after 1961, impacted Real GDP per capita (dotted line) and oil production (continuous red line), versus Oil price (continuous blue line). Below, a few more pointers:


Blue– Capitalism: GDP and Oil production grow unbounded, despite Oil price

Yellow– Socialism: GDP binds to Oil price and Oil production drops materially

Red– Communism: GDP depends on Oil price and Oil production starts a persistent descent


  1. The coloring of the labels coincides with the periods along the timeline when Venezuela, formally or not, adopted each type of economic policy. Note that GDP & Oil Production outcomes closely follow the rubric above, even for the shortest time period (89- 92).
  2. Though in 1961, Venezuela adopted central planning as the guiding principle of its economy, it continued to enjoy the same degree of economic freedom that allowed foreign concessionaires to invest capital, knowledge and technology in developing oil production to the high reached in 1970, when our new constitution began impacting it.
  3. Though constitutionally allowed since 1961, the nationalization of Venezuela’s oil business was not openly debated in Congress until the late 60s. Yet, by 1970, the certainty that the oil industry would be nationalized had pushed foreign oil companies to stop all new investments in oil exploration and production expansion.
  4. Even as oil production begins dropping sharply in 1970, GDP doesn’t follow until 1977, a year after oil nationalization. What postponed the decline was the sudden and massive inflow of petrodollars, coming from the multiple oil price increases that began in 1973.
  5. Capitalism returns in 1989, and though cut short by a military uprising that forces the president to resign, its economic-liberalization and government decentralization reforms go on to benefit Venezuela for at least a decade. Note also that, as per the rubric, GDP & Oil production begin growing, despite oil prices dropping during most of this period.
  6. Upon the return of Socialism, economic difficulties caused by years of low oil prices and a local banking crisis forced the new president to honor the previous government’s plan to reopen Venezuela’s oil business to foreign oil firms, under the Orinoco Oil Joint Ventures. Once again, Capitalism is what brings oil production back to higher levels.
  7. Communism begins under a democratically elected militaristic regime, that eventually seizes power via undemocratic maneuvers and starts an indiscriminate wave of company expropriations, FX and economy-wide price controls, and many other counterproductive economic policies that over time bankrupted Venezuela’s economy.



Only one year after measuring how much devaluation the Chavista regime had imposed on its citizens since 1999, the aggregate sum of counterfeit money the Venezuelan central bank has issued totals  6.5 million times the amount of Bolivars available in Venezuela, when Chávez came to power in February 1999.

As a benchmark of Venezuela’s purchasing power for many decades, our “4.30” represents an ideal gauge to measure the degree of embezzlement gulped down by the current regime since 1999.

In fact, the monetary dilution of the past 19 years has been so many times greater than “4.30,” we need to use a logarithmic scale to visualize it. Additionally, log scaling allows us to expose the scam, using data directly available on Banco Central de Venezuela’s web page, rather than using conversions that require any explanation.

As the chart confirms, via massively printing Bolivars, the government diluted all of the capital Venezuela had amassed until 1999, plus every resource that entered our economy since then.



Monetary Base

Inorganic Money



Edition (Spanish)


Banco Central de Venezuela

Dólar Today

U.S. Energy Information Administration

Organization of the Petroleum Exporting Countries

Servicio Nacional Integrado de Administración Aduanera y Tributaria de Venezuela

Ministerio de Petróleo y Minería de Venezuela