Throughout history, jurisdictions that enabled citizens to accumulate + store wealth in a sound money saw periods of immense innovation, cultural richness & relative peace.
It acts as a magnet for both capital and the highly skilled.
By permitting access to sound money, a government or ruler is providing proof that they are not able to steal from the people. Abuse of this trust, through coin clipping or metal debasement, has almost always coincided with downfall.
Confidence in one's money holding value will influence a person's confidence in their future. This incentivises making decisions that consider a longer time horizon and encourage community engagement.
Cooperation, community and long-term planning discourage tit-for-tat offensive violence.
Prolonged periods of peace encourage low time-prefence investments. Sound money reduces the amount and duration of malinvestments.
The highly skilled are attracted to jurisdictions that are peaceful, thoughtful and resourceful.
This creates a competitive advantage and actively drains opposing jurisdictions.
If provided certain assurances, investable capital follows the talent migration.
Sound money increases the value placed on one's reputation, attracting ethical participants.
Long-term capital and ethical talent find common ground in solving the biggest/hardest problems.
The biggest/hardest problems provide the greatest benefit to society and thus come with the greatest payoffs.
This increases the resources of investors, talent and the jurisdiction.
The increase in prosperity will spur competing jurisdiction, trying to replicate the feedback loop.
The basis of which starts with a sound money.
/END
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When Ray Dalio uttered the words “cash is trash!" on CNBC in early 2020, he seemingly broke the fourth wall.
For someone of his stature and influence within the political machine to acknowledge the chronic and unavoidable debasement of fiat currency was a clear turning point.
While he did temporarily reverse his position, his general view remains unchanged.
The perverse incentives of the fiat system—siphoning value from savers to fund deficits—can only lead to more of the same.
20 years ago, Michael Crichton coined a term that has now become essential for navigating the incentives of today’s news media landscape:
The Gell-Mann Amnesia Effect.
🧵
Named after Nobel Prize-winning physicist Murray Gell-Mann, Crichton explains the pitfalls of observing errors in the reporting of a topic, yet trusting the same source in areas where you are less knowledgable/able to verify accuracy.
Bitcoin is multidisciplinary and multifaceted.
It represents a major paradigm shift in innovation and the communication of value. Thus it can take years to gain a basic fundamental understanding.