Monday, April 18, 2022

The paradigm of the crypto-currency market changed 180 degree since about a half decade ago.

Very interesting for me! When I read a blog "The text book for being rich (Ironic name as the author says lol )" more than a half decade ago, I learned that Bitcoin could be a new alternative to Gold because of their similarities such as the supply limitation determining their price. However. the paradigm of the crypto-currency market changed 180 degree since about a half decade ago.

The supply of Bitcoin has the diminishing return because the supply is determined the overall CPU capability of all the computers participating in this blockchain network.  In another word, it cannot be simply printed of thin air like the fiat-currencies.  Therefore, these market participants used to think that, even though these crypto-currencies do not have their own precise physical forms, they were thought as though they had it. Therefore, many professionals including the author of this book suggested to treat the crypto-currency as an inflation hedge. 

Nevertheless, the paradigm has drastically changed since various other kinds of the crypto-currencies were introduced to the market so that Bitcoin has become far less scarce as it used to be since then.  Instead of the supply scarcity, the speculative demand has started to be far more influential on the crypto-currencies. 

The price inflation goes up when the capital market is heated up with extra confidence in investment more than saving. By contrast, the market falls into the deflation when the confidence goes down so that the market participants start preferring much safer assets than the volatile crypto-currencies.  Therefore, the crypto-currency value change is recently positively correlated. 

All in all, the correlation between the crypto-currencies have suddenly and drastically changed from negative to positive!   

 



Re-evaluating Charles De Gaulle

 

The first president of the fifth republic of France Charles De Gaulle is indeed a remarkable figure having led France to maintaining her stead economic and political position as an autonomous modern developed nation as well as a key European Union (EU) member state with her significant influence on the entire union. Yet, his policies were often controversial and received some negative feedbacks from various political factions including socialists, those supporting more Anglo-Saxon style free market socioeconomic policies, and the former French colonial states. At the same time, not only French citizens but also EU citizens would not be able to keep having their influence over the world politics without the current French political power having been grown since De Gaulle administration. While France is currently on the verge of determinig her future pathway. 

After enormous fatigues and scars of wars and the loss of French colonies after the World War II (WW2), France has lost her influence and power as a sovereign state in the world. The United State of America (USA) rose up as the newly arising super power together with her strong ideology of liberal democracy and capitalism. At the same time, the United Soviet Socialist Republic (USSR) also strengthened their influence and power over the world politics with their hardcore socialist ideological principle. France selected the alternative of being France as a unique state prevented from becoming a loyal satellite state of neither the USA nor the USSR.  Thus, France needed her own strength of being as independent influential modern state as well as leading the newly formed union of European nations, the EU, in the world politics. Charles De Gaulle thus determined to implement a unique controversial policies attempting to deserve the majority French and EU citizens. 

 

- Controversial interventionist economic policy

Firstly, De Gaulle administration decided to keep the market economy itself whereas it adopted the state's positive intervention to it as well as a high proportion of the state's owned public sector firms. In another word, France selected a pragmatic choice not ideologically being tied to a particular socioeconomic policy like a staunch dogmatic socialism or an Anglo-Saxon style wild capitalism.

There are some negative effects of the contemporary French economic policy. A government may have mistake of judging how the business cycle moves to determine the degree and the characteristics of their intervention. A huge market share of the state ownership of various industrial categories such as manufacturing industries and financial industries hinders a spontaneous economic growth based on the active and fair competition. 

Nevertheless, for the contemporary France, it was inevitable to install such an economic policy to enable French own national brand by protecting it from losing to a competition with their strong competitors such as the USA, Japan. and neighbouring West-Germany. It is equivalent to the development dictatorship adopted to some contemporary emerging developing nations such as Singapore and South Korea. Although France was already a developed Western nation, she was under a constant threat of losing her initiative in the world economy. Therefore, France was required to have a strong intervention lead by one rational public authority gathering a group of educated and experienced elites to conduct her national economic policy planning as same as these emerging developing nations.

 

- Independent Nuclear Research and Development (R&D)

As the contemporary period, those satellite nations of both the USA and the USSR implemented the joint R&D of their nuclear technology with their suzerain either the USA or the USSR. The USA was the first nation invented the nuclear power generation and weapon, and the USSR followed to invent their own ones (although some have argued it could be their self-proclaimed). 

Charles De Gaulle has insisted on proceeding the own nuclear technological R&D led by French government and higher educational institutes because he had predicted that owning France's own nuclear technology will be the key to take the initiative in the world politics. Furthermore, nuclear power generation provides both France and the entire EU with the far more efficient alternative electricity generation to the conventional electric power generations. This initiative has encouraged France to take a lead of the EU as the main supplier of the electricity. 

Regarding this nuclear R&D, there has also been strong negative feedback especially from the anti-nuclear advocates and the former French colonials. De Gaulle administration tested their nuclear bombs in their former colonial lands which hugely disappointed the indigenous citizens there. Moreover, their own R&D with their own effort certainly involved the victims of the radioactive pollution of the nuclear accidents.  There is an inevitably high risk of nuclear contamination permanently harming the health of these individuals while testing and repairing their nuclear apparatus and clearing the radioactive mess. 

On the other hand, in terms of the health hazard risk per electric power generation, with comparison to the conventional fossil fuel based thermal power generation, the nuclear power generation is relatively far less harmful for individuals. For example, the ratio of individuals' health hazard risk per electric power generation is way higher for the counterpart fuelled with fossil fuels. In addition, France would have had to import a massive amount of fossil fuels from abroad which would perpetuate France's dependency on the other nations. 

By contrast, France has prevented herself from being reliant on and easily manipulated by foreign nations after securing her own self-reliant electric power generation source. All in all, even with high financial, environmental, and ethical cost, the benefit paid off for France is substantially higher. In another word, the fundamental political decision of De Gaulle administration accomplished "The greatest sum of pleasures with the lowest sum of pains as the principle of moral and legislation". 


Having observed these examples of De Gaulle administration, the achievements and the assets of De Gaulle administration are undoubtedly remarkable despite controversies.  The EU needs France for various French advantages including the economic and political initiative backed up by her own nuclear technology available to offer for the EU.  Also, France needs the EU membership with a huge initiative to use the EU as her leverage of expanding her economic and political influences as a key member with a high initiative there. De Gaulle administration initially paved this pathway to enable both France and he EU to secure their initiative. Hence. under such a current political havoc, it may be productive to recall and re-evaluate Charles De Gaulle and his achievement.