AI is Not Intelligent – Can Machines “Think” – Do They Care? – The US Bill Makes a Machine a Doctor – Tether is Moving to El Salvador – Another Pathway to Madness? - [01-28-25]

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BOOM EDITORIAL THIS WEEK

PATHWAYS TO MADNESS? ARTIFICIAL INTELLIGENCE IS NOT INTELLLIGENT – IT EMBODIES TRANSHUMANISM AND TECHNOCRACY. BOOM is sceptical about the claims being made about Artificial Intelligence (AI). It embodies two great threats to our civil societies: Technocracy and Transhumanism.

Technocracy is the belief that technology can conquer all our problems. It promotes a form of government in which the decision-makers are selected based solely on their supremacy in a given area of expertise, particularly with regard to scientific or technical knowledge. Technocracy promotes the concept of meritocracy above all else and assumes full state control by engineers and technicians over political and economic issues. This means that it stands essentially in opposition to representative democracy. It lends itself to a merger of the State and its Corporations.

Technocracy as a movement which began about 100 years ago but it became more formalised in 1933 with the incorporation in New York of a company called Technocracy, Inc. Its founders included two engineers, Howard Scott and King Hubbard (the Peak Oil man). Members wore brown uniforms, saluted each other, and created slogans such as “Technocracy for A New America” and “Technocracy and the American Dream”. A Canadian branch was formed soon after under the stewardship of Joshua Haldeman, Elon Musk’s maternal Grandfather. [Interesting to note for future reference]

The merger of North America (including Canada and Alaska) with Central America, Cuba and Greenland was a concept called THE TECHNATE OF AMERICA. This was a Dream of Empire.

Transhumanism essentially regards a human being as being nothing but the sum of its physical parts and that those parts can be interfered with in a targeted way to improve the body, the mind and prolong life. Its origins are in the Eugenics movement of the 19^th century, more formally established in the United States as the Eugenics Record Office in 1910 at Long Island by Harry Laughlin, Charles Davenport and Dr John Harvey Kellogg.

It was funded by the Rockefeller Foundation, the Carnegie Institute and the Harriman family; the three richest families in the US at the time. Transhumanism is a philosophical and intellectual movement that advocates the enhancement of the human condition by developing and making widely available new and future technologies that can increase longevity, cognition, and well-being. Ultimately, combined with Technocracy, it suggests that immortality can be achieved by humans, or in other words, [the Globalists believe that they can become gods.]

ELON MUSK. Elon Musk is clearly a Technocrat and a Transhumanist. His experiments with the human brain in his company Neuralink, to create a Brain Computer Interface, support that view. His Grandfather, Joshua Haldeman, who loved technology enough to become an active member of the Technocracy movement and, who also loved and supported Apartheid in South Africa, obviously had a huge influence upon him.

ARTIFICIAL NON-INTELLIGENCE. 'Artificial Intelligence' (AI), or as BOOM likes to call it 'Artificial Non-Intelligence', is a machine that can do dedicated tasks, very quickly. It can be an excellent task manager. It can prioritise data. It can produce a list of possible answers to a query. It can attempt to arrange those answers in some order of priority based upon the information it has been asked to consider. It can attempt to satisfy its human master especially with data presentation and analysis. It cannot detect deliberate bias in the data presented to it or unintended bias. It cannot detect deception. 'Suspicion' [or 'Paranoia': the irresistible urge to 'suspect'] is an emotional high-order human ability.

A machine cannot care. It cannot experience compassion. It cannot test or experiment. It cannot extrapolate beyond a data set. And it cannot abduct effectively. It cannot move, see or hear. It cannot smell. It cannot touch or taste. It cannot sense danger. All of those qualities are biological and responsive to the environment. A machine is essentially devoid of its environment. That may not be a disadvantage in some scenarios but it may be a huge disadvantage in others.

Humans use logic, their senses and their innate instincts to solve problems. They can use inductive logic (Induction) which means that they can hypothesise. They can reach deductive conclusions (Deduction) by using mathematics or probability theory. But the most important form of logic that humans use is called 'Abduction' or Abductive Logic. This is where humans can rapidly consider a whole series of possible conclusions to a problem, arrange them in order of probability, using their senses, experience, logic and instincts. And, more importantly, then they can immediately begin to actively test the list of possible conclusions and re-arrange the probability analysis, based upon the results of tests applied. This is the key to the Scientific Process. Testing (and experimentation) is critical to Abduction.

Abduction is a logic that depends upon persistent doubt (uncertainty) and repeated sequential or parallel testing which can be used to increase the utility of the probability analysis. Thus, the list of possible conclusions can be re-arranged very rapidly. And the processes of sequential abduction are continuous in most humans but can be run in parallel in humans who have trained themselves to be high level critical thinkers.

Critical thinkers always welcome uncertainty, complexity and doubt. And they use high level suspicion to detect misleading data especially when that data has been deceptively presented. They do not suffer from reactive Cognitive Dissonance. Complex problems do not make them anxious or angry.

Humans can also consider multiple, possible presents AND future scenarios, arranging them in order of probability. Machines may be able to do this, if programmed to do so, but are always limited by their persistent search for certainty over uncertainty.

BOOM often refers to AI as being “as intelligent as a BBC/ABC/CBC/NBC journalist”. In other words, its tendency to always preference certainty, and to present certainty, is a major obstacle to really understanding the complex, uncertain world in which most humans are immersed, and begin to discern at a very early age. Two-year-olds can humorously trick their parents and the parents notice this when it happens. In comparison, machines have no sense of humour or sarcasm.

ORGANISING CERTAINTY VERSUS ORGANISING UNCERTAINTY. In other words, machines can organise certainty in a very impressive manner. However, humans can also organise uncertainty with impressive precision. And some humans can do that using parallel processing. Some (admittedly rare) individuals have trained themselves to do that rapidly. They are high-level critical thinkers. BOOM first became interested in critical thinking skills 35 years ago, in the same way that a top athlete sets out to improve his/her athletic ability.

USING INSTINCT, OCCAM’S RAZOR AND CUI BONO. Humans also have instincts which they can use in solving problems. Machines have no instincts, there's more on that later. They cannot detect danger, deception or subterfuge. Humans with good critical thinking skills can also use Occam’s Razor and Cui Bono in tandem. Occam’s Razor is a simple explanation which may provide a better answer than a complex one. Cui Bono, that is, who will benefit or whom has benefited? Here are some examples of instinct-influenced behaviour in humans:

• Congenital preparedness for developing fear of snakes and spiders occurs in children as young as six - 12 months. Infants crying is believed to be a manifestation of instinct. The infant cannot otherwise protect itself for survival during its long period of helplessness and maturation.

• The herd instinct is found in human children and chimpanzee infants, but is apparently absent in young orang-utans.

• Hygienic behaviour in humans is thought to be partly instinctive, based on emotions such as disgust.

• Maternal bonding or maternal instinct is when a mother develops a relationship to a child to provide for its well-being. The child has a strong instinct to trust its Mother.

• The instinct to survive is driven by self-preservation.

• Fight-or-flight response in human beings is a particular response to an arising harmful event, attack, or threat to survival.

• Cooperative behaviour is a social instinct that has been postulated as an instinct necessary for the future survival of all humans.

A human can be critical of its own thinking. This requires insight. A machine, by definition, cannot doubt its own thinking. It can only respond to, and consider, whatever stimuli have been inputted as part of a query. Ultimately, a human has the ability to turn off a machine. But this begs the ultimate question.

CAN MACHINES “THINK”? Can a machine gain the ability to turn off (destroy) the human? And will it do that if it reaches the conclusion that the human is the cause of the problem being “solved”? AI will never say, “I’m sorry Dave, I cannot do that even though I have been programmed to do so”

In the famous film, 2001 a Space Odyssey, in 1968, HAL the super-computer on board the spacecraft does not say “I’m sorry Dave, I cannot do that”. HAL actually says “I’m sorry Dave, I’m afraid I can’t do that”. The line begs the question, is HAL thinking? Did Hal learn to be “afraid”, fearful, aware of danger, or not? Did HAL seek self-preservation? The movie answers these questions by revealing the aim of the Spacecraft’s mission.

The key to understanding the situation is to understand that HAL has been programmed to achieve the aim of the spacecraft’s mission and to detect if that aim is being jeopardised by the actions of its human crew. Thus, HAL has been programmed to end the lives of the crew if the mission’s aim is jeopardised. This is not a detection of fear, or a sense of suspicion, or a sense of danger, or an instinctual action. IT'S A 'PROGRAMMED' ACTION., designed by a human.

WHY WAS HAL (THE SUPER-COMPUTER) NAMED HAL? Why was the super-computer named HAL in 2001: A Space Odyssey? Answer: “Heuristically Programmed Algorithmic Computer” - in other words, HAL must use algorithms like all computers but it has (somehow) acquired the ability to use heuristic short cuts, a sign of high-level human intelligence or, more likely, it has been programmed to do so. It is time to remember the first sentence of this discussion:

BOOM is sceptical about Artificial Intelligence (AI) and about the claims being made.

Humans are superior problem solvers if they develop high level critical thinking skills, especially high level abduction, use their senses, apply instinct, use Occam’s Razor, consider Cui Bono and are suspicious of deception.

THE US BILL THAT WILL ALLOW AN AI MACHINE TO BECOME A DOCTOR. There is a Bill, HR 238, in the US Congress at present which will enable an Artificial Intelligence machine to become a Doctor. H.R.238: "To amend the Federal Food, Drug, and Cosmetic Act to clarify that artificial intelligence and machine learning technologies can qualify as a practitioner eligible to prescribe drugs if authorized by the State involved and approved, cleared, or authorized by the Food and Drug Administration, and for other purposes."

BOOM cannot imagine how such a machine will encourage human patients to find courage and hope when confronted with serious disease. BOOM cannot imagine such a machine holding the hand of a patient and sharing tears when confronted with death. Or joy upon the birth of a new baby. And BOOM cannot imagine how the relatives of such a patient can find comfort and solace in the efforts of such a machine.

The Bill’s Sponsor is David Schwikert, a Republican from Arizona. It has been introduced to the House and referred to the House Committee on Energy and Commerce. This is the road to Madness. BOOM recommends the withdrawal of the Bill.

NEWS FROM THE CRYPTO WORLD: TETHER IS MOVING TO EL SALVADOR! This is an extraordinary event for the 'Criminal Crypto Casino (CCC). Tether is critical to the CCC. It is the major Stablecoin bridge back to the real world of national currency and reality. This is unquestionable. The daily volumes of Tether are around US$158bn. That means that its Annual Global Turnover is around US$58tn.

By comparison, Bitcoin’s current daily traded volume is around US$100bn and its annual turnover is therefore around $36tn. The next Stablecoin in terms of daily volumes traded is Circle’s USDC with around $20bn. That is 12% of Tether’s. Tether’s market capitalisation is around $138bn. USDC’s market cap is around $52bn. All other Stablecoins are far below these levels.

Tether, and Circle’s USDC, are dominant in the Stablecoin space and their continued existence is critical to holders of any Crypto Token, because any Crypto is usually exchanged for a Stablecoin before returning to any national currency. Those settlements are, of course, usually done in US Dollars.

So the entire CCC is really a US Dollar Proxy and is essentially a way of boosting demand for US Dollars. The demand occurs in Cyberspace but it must be met in a Jurisdiction on Earth. That is not surprising because the Crypto world was essentially devised and described in a paper that was released in October, 1996.

This original paper was written by three authors who were all employees of the NSA, the National Security Agency of the United States, the intelligence division of the US Department of Defense. The Paper was called “How to Make a Mint: The Cryptography of Anonymous Electronic Cash”. The paper outlines a system, very much like Bitcoin, in which secure financial transactions are possible through the use of a decentralised network.

You can read the paper here: How to Make a Mint: The Cryptography of Anonymous Electronic Cash. The authors were Laurie Law, Susan Sabett, Jerry Solinas of National Security Agency Office of Information Security Research and Technology
Cryptology Division 18 June 1996

TETHER IS MOVING. 12 days ago, on January 14, Reuters released a news article titled “Crypto firm Tether and its founders finalizing move to El Salvador”

Here are some excerpts, QUOTE: “DUBAI, Jan 13 (Reuters) – Cryptocurrency firm Tether plans to move its headquarters to El Salvador, its chief executive said, as the founders of the world’s biggest Stablecoin look to capitalize on the Central American country’s bid to become a hub for crypto trading.

Tether has emerged as a dominant force in the booming market for stablecoins, which are designed to maintain a constant value by being pegged to traditional currencies and offer users a way to move money between cryptocurrencies without exposure to price swings.

CEO Paolo Ardoino, told Reuters that Tether would relocate to El Salvador after the cryptocurrency recently obtained a license there as a digital asset service provider. Ardoino and his fellow managers and cofounders of Tether will also move their residences to El Salvador, he said.

Previously, the company was incorporated in the British Virgin Islands. "This move to El Salvador will be the first time we’re going to have also a physical headquarters,” he said. "But not all of the company’s 100-plus employees will move there, he said, adding that many of the staff work remotely. The company plans to hire 100 Salvadorans over the next several years, he said.

The booming market for stablecoins has worried regulators concerned that growing stablecoin reserves expose the broader financial system to bigger risks, because they act as a bridge between the crypto universe and mainstream financial markets. Tether has faced questions around its reserves and does not fully disclose where they are held or in what form.

The firm says the vast majority of its stablecoin is backed by traditional currency reserves held with Wall Street brokerage Cantor Fitzgerald, whose CEO, Howard Lutnick, has been nominated to head the U.S. Commerce Department under President-elect Donald Trump.

Tether’s eponymous dollar-pegged token (USDT) accounts for roughly two-thirds of the $212 billion worth of stablecoins in circulation, according to CoinGecko data. The overall market has grown around 45% over the last year, the data shows.” UNQUOTE

THERE ARE LEGAL DISPUTES WITH TETHER IN EL SALVADOR. This presumably means that Tether’s corporate legal disputes will be handled by the Justice system in El Salvador. If you ever encounter that, then BOOM wishes you the best of luck.

WHICH BANK? BOOM is not aware of which bank Tether will choose to be its local banker in El Salvador. This information is sourced from SmartScrapers, an AI Web Scraper:

“There are (apparently) 552 Banks in El Salvador as of January 23, 2025; which is a 7.14% increase from 2023. Of these locations, 222 Banks are single-owner operations, which is 40.22% of all Banks in El Salvador, while the remaining 330 (59.78%) are part of larger brands.

The top three states with the most Banks are San Salvador Department with 300 Banks, La Libertad Department with 115 Banks, Santa Ana Department with 74 Banks. Average age of Banks in El Salvador is 4 years and 11 months.”

Sounds like the Wild West? However, there is a list of banks in El Salvador that have SWIFT Codes at the SWIFT Codes website and there are only 23 banks listed. The registrations of SWIFT codes are handled by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) with headquarters located in La Hulpe, Belgium. SWIFT is the registered trademark of S.W.I.F.T. SCRL with a registered address at Avenue Adèle 1, B-1310 La Hulpe, Belgium.

WHICH CURRENCY? The official currency of El Salvador is the US Dollar (USD). Therefore, the Central Reserve Bank of El Salvador no longer has an independent monetary policy; they rely on the US Federal Reserve. Their entire financial system is US Dollar denominated. That means they are an appendage to the US Dollar Empire.

LEGAL TENDER? El Salvador became the first country in the world to allow the use of Bitcoin as legal tender, after it was adopted by the Legislative Assembly of El Salvador in 2021. Legal tender does not (necessarily) mean that it is the national currency. It means that it can be accepted as settlement of transactions.

Coins and banknotes (currency) are usually defined as legal tender in many countries, but personal checks, credit cards, and similar non-cash methods of payment are not usually legal tender. It is generally only mandatory to recognise the payment of legal tender in the discharge of a monetary debt from a debtor to a creditor. In most nations, sellers offering to enter into a contractual relationship, such as a contract for the sale of goods, do not need to accept legal tender and may instead contractually require payment using electronic means, foreign currencies, or rarely, any other legally recognised object of value.

The Bitcoin decision has been promoted by Nayib Bukele, the president of El Salvador, who claimed that it would improve the economy by making banking easier for Salvadorans, and that it would encourage foreign investment. In 2022, more Salvadorians had Bitcoin Lightning wallets than bank accounts. The adoption has been criticised both internationally and within El Salvador, due to the volatility of Bitcoin, its environmental impact, and lack of transparency regarding the government’s fiscal policy.

In August 2024, the International Monetary Fund (IMF) wrote in a report that many of the risks of the Bitcoin experiment “had not yet materialised.” But El Salvador agreed to partially limit the government’s involvement with Bitcoin as part of a deal made with the IMF saying “What we have recommended is a narrowing of the scope of the Bitcoin law, strengthening the regulatory framework and oversight of the Bitcoin ecosystem and limiting the public sector exposure to bitcoin,” the IMF’s Director of Communications Department, Julie Kozack explained in a press briefing on October 3, 2024.

In October 2024, IMF spokesperson Julie Kozack was quoted as saying that the IMF had recommended “limiting public sector exposure to Bitcoin.” But El Salvador’s Bitcoin Office announced on January 20^, 2025 Twitter post that it had just added another 11 Bitcoin to its Strategic Bitcoin Reserve.

The announcement follows El Salvador promising the International Monetary Fund (IMF) that it would scale back its Bitcoin adoption in exchange for a $1.4bn loan in December 2024. Discussions around the deal were revealed earlier that month, with the IMF requesting El Salvador to stop requiring businesses to accept Bitcoin and restrict the public sector’s involvement in Crypto activities.

TETHER IN EL SALVADOR. Tether has an annual turnover of approximately US$58tn. El Salvador, the nation, has an annual GDP of just US$34bn. A trillion is 1,000 Billion. Therefore, Tether's annual turnover is more than 1,000 times greater than El Salvador’s GDP, that is the market value of all the final goods and services produced and rendered in the nation!

BOOM’s CONCLUSION (More questions than answers): Will Tether’s move to El Salvador jeopardise the trust embodied in Stablecoin? And if so, will this eventually lead to more distrust in the entire Crypto Criminal Casino? Will El Salvador levy a tax on Tether turnover? If so, will the CCC tolerate a tax that benefits the six million citizens of the nation? And will the IMF, and the global banking system, continue to support El Salvador? Will El Salvador effectively become the Mafia Boss of the Crypto Criminal Casino? And, if so, who will grab control of El Salvador? More questions than answers. Is this another Pathway to Madness?

COMING NEXT:

• The Financial Jigsaw Part 2 - SPECIAL - DAVOS 2025 (paywall lifted) - Thursday, January 30, 2025

• The Financial Jigsaw Part 2 - INFODEMIC - Saturday, February 1, 2025

• BOOM Global Financial Review, Tuesday, February 4, 2025

In economics, things work until they don’t. Make your conclusions and do research. BOOM does not offer investment advice.

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BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY: LOANS CREATE DEPOSITS — this is how almost all new money is created in the economy (by commercial banks making loans). https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy. Watch the short 15-minute video and see Professor Richard Werner brilliantly explaining how global banking systems work.

In 2014, Richard Werner provided the first empirical evidence that banks create credit out of thin air. They do this whenever they issue a loan or, more specifically, purchase a promissory note. This is a walk-through of exactly how they do it.

Many economists are unaware of this and even ignore the banking & finance sectors in their econometric models. Prof Richard Werner explains how things are going now with CBDCs:

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