A quick thread walking through some of my latest piece "Our Most Brilliant Idea" where I explore the nature of ideas, their generative source, and (of course) #Bitcoin
Ideas are the origins of everything we say, do, or make. The purpose of any economy is to generate and share useful ideas through free trade (to achieve what economists call the division of labor or knowledge specialization).
Resultant knowledge encodes the patterns of action we use to etch our imaginations into the world around us. Winning ideas are chosen by the market, only to be widely distributed as material riches, finer manners and morals, and more profound art.
Our lives are lived enacting our ideas. As HG Wells said:
“Human history is, in essence, a history of ideas.”
Trade, then, is mankind’s “meta-idea” — the generative idea of all our best ideas. Meta (from the Greek μετά, meaning “after” or “beyond”) is a prefix meaning more comprehensive or transcending: trade is an idea about improving ideas.
Free market capitalism is an idea unequaled in its generation of innovation. It proved itself as the most successful economic model for expanding trade, ideation, and wealth creation in the 20th century ideological contention between American capitalism and Soviet communism.
Capitalism is a socioeconomic system that optimizes for trade via the 3 pillars of private property rights, rule of law, and honest money—their stability is the bedrock of peace: with fixed and simple laws, market participants are forced to play the game well to make a living.
Money is the medium through which market participants express their ideas, preferences, and values. Pricing systems are economic telecommunication networks endlessly echoing and coordinating market action by dynamically informing everyone of everyone else’s trades.
A true free market is a forum of unhampered and voluntary exchange where ideas compete, combine, and transform. The free market may be considered the ultimate distributed computing system — a nexus of consciousnesses driven by human action and interconnected by prices.
Mankind makes the world his own by channeling energy across the ideological field lines fashioned in his extended mind—the free market. Such ideation drives civilization, as Oliver W. Holmes said:
"Man’s mind, once stretched by a new idea, never regains its original dimensions.”
#Bitcoin is a new idea for money that gives us the freedom to: trade without central bank interference, store our wealth in a place resistant to seizure, and to embrace truth in a world drowning in deception.
Read about this in much more in my latest writing "Our Most Brilliant Idea," a piece toward which all my prior writings have been building towards. #Bitcoin may actually prove to be the most brilliant idea in human history...
A deficit occurs when any organization—a family, a company, or a government—generates expenses that exceeds its revenues.
Most call this a "net loss," but for governments it is typically called a deficit.
But how can the US government continually spend more than it earns?
Simple: the US government can print more US dollars ("points" as she calls them) to cover its deficit.
US dollars (and all fiat currencies) are simply a claim on the savings of society—redemption certificates for the goods, services, and knowledge generated by productive people.
1/22. In the spirit of independence day weekend, I just published my latest writing: “Masters and Slaves of Money" where we explore why central banking is an institution of time-theft and #Bitcoin is a weapon for peace.
2. In 1776, the US declared its independence from England. For years, the decentralized state network resisted the implementation of a central bank, knowing the evils it had caused in eras past. Today with Bitcoin, people globally are declaring their independence from The Fed.
3. Money is a tool for trading human time. Central banks, the modern-era masters of money, wield this tool as a weapon to steal time and inflict wealth inequality. History shows us that the corruption of monetary systems leads to moral decay, social collapse, and slavery.
When fiat currency dies, conditions tend toward deflation first (since money becomes more valuable when uncertainty looms), before becoming increasingly inflationary and, finally, hyperinflationary. #Bitcoin was purpose-built for this.
A thread on my current macro view on USD:
Economic uncertainty is extremely high. Market participants are stashing dollars to self-insure against this uncertainty. Consumers are delaying discretionary and major purchases.
This behavior further constricts economic activity in a consumer-driven society, leading to more economic fallout, more uncertainty, and so on recursively. Policy responses are increasingly uncertain (so much so that the charts are broken temporarily):
Many people have asked me to share the notes from my appearance on the @APompliano podcast where we discussed "An Open Letter to @RayDalio re: #Bitcoin"
This thread is a distillation of those notes, let's begin⏬
Everything we say, do, or make starts out as an idea. The purpose of the world economy is to generate and share useful ideas through trade. As we trade, our ideas become better, giving everything we say, do, or make more specialized qualities
Consider how our transportation technologies have gone from wagons, to automobiles, to airplanes. In trade, everything is valued at some ratio of everything else. For instance, this car might be worth 132 chairs, or this house worth 11 cars.
@RayDalio recently published the second chapter in his series “The Changing World Order.” Chapter 2 is titled “Money, Credit, and Debt” and explains these concepts in some depth.
In this thread, we will go deeper on these explanations. Let’s dive in:
Ray starts: “All countries can print money to give to people to spend or to lend it out. However, not all money that governments print is of equal value.”
It is important to first realize, that all government currencies began as warehouse receipts for monetary metals.
Historically, monetary metals were the best technologies in terms of money’s five traits: divisibility, durability, portability, recognizability, and scarcity. Of these, gold was relatively the most scarce, and therefore it outcompeted others as the soundest store of value.
1/33. I just published “The Number Zero and Bitcoin”
Bitcoin represents the discovery of absolute scarcity for money, an unstoppable idea that is changing the world tremendously, just like its digital ancestor: the number zero.
2. Many believe that Bitcoin is “just one of thousands of cryptoassets." This is true in the same way that the number zero is just one of an infinite series of numbers.
3. In reality, Bitcoin is special, and so is zero: each is an invention which led to a discovery that fundamentally reshaped its overarching system—for Bitcoin, that system is money, and for zero, it is mathematics.