MONEY CLASS OF THE DAY: Money Illusion and Unit Bias, Bitcoiner style \ stacker news ~econ

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MONEY CLASS OF THE DAY: Money Illusion and Unit Bias, Bitcoiner style x.com/bt_chick/status/1981451380326867258

12.6k sats \ 38 comments \ @denlillaapan 24 Oct econ

WELCOME BACK!

I've definitely neglected my econ educational duties as of late (MONEY CLASS origin: #738907, #733580, all entries here) Yesterday, my fellow Swede influencer (BTChick) pushed me toward writing something. Tl;dr: I'm not impressed by Bitcoiners' asinine (read: retarded) takes on money.

Bitcoiners might be the stupidest people around. Not because they know nothing or are misinformed, but because they – Dunning-Kruger style – think they know a bunch and thus say things very confidently… things that are just straight-up wrong and unfathomably stupid. Yes, that’s right; I don’t think most Bitcoiners understand bitcoin (…or fiat, or gold etc.). Money illusion and unit bias runs deep — sometimes even in the wrong direction.

At some level, I find that my cosmic role in this Bitcoiner space is to help Bitcoiners understand their monetary asset better.

OK, amazing, sounds like typical runaway inflation, fiat money printing gone bad yes?? WE SHALL HAVE NICE OPERAKÄLLAREN MEALS!

Backdrop: What Money Does in Society

Money is a veil for real economic transactions (#793537); it's the hidden beauty of human cooperation (#780358). It's also why the monetary system can do its job reasonably well across magnitudes. It’s not harder or more difficult to live your economic life in U.S., Iceland, or Sweden, even though their local currencies range across orders of magnutides $1 = 9.4 SEK = 123 ISK. Prices, wages, assets etc are quoted in 10-100x larger numbers… big(!) deal.

The first obvious and awkward error in BTChick's example is the USD translation: She just uses 11… which, fair enough, was what the market traded krona for in early 2025 — but for the last few months have been hovering around 9.5. So right off the bat, the numbers are wrong.

Second problem, in 1968 the USD/SEK is pegged at 5.17 in accordance with the European Monetary Agreement, a sort of proto-pre euro that many European countries abided by even before the gold pool broke in 1968 and U.S.-gold exchange standard fell off in 1971. (Like most Bitcoiners, BTChick would have no idea about this because... duh, monetary history/reality isn't sexy.) P.S., pegs are fake stories (#747181) and they break, but whatever; in 1968, they held.

Meaning, here are the dollar amounts she should have used: 2.32+6.19+1.16+1.06 (+ 12.5% service) sum = 12.08 (not $5.70, as she claims).

Third, median household income in the U.S. in 1968 was about $7,700, meaning a two-person household could have afforded 53 of these meals every month (had they spent their entire pre-tax income on that.) A random sample of 1968-69 luxurious dinners in American cities return numbers in that price region, too (between $10 and $25, e.g. Caravelle, Le Mistral, Four Seasons, Tadich Grill etc). So, with their full 1968 pretax incomes of $7,700, a median household could have afforded between 43 and 24 (very) fancy and luxurious dinners in equivalent American cities at the time. (Sweden is somewhat of a poorer country than the U.S. in 1968… also, these are hypothetical pre-tax, and with a higher tax regime the take-home wage for a Swedish person in 1968 would be way less than their equivalent American income-earner.)

In 2025, using her 2,000 krona ($212) estimate, a regular two-person American household (83.7k income) could afford about 33 of these meals today.

In 2025, the average(!) monthly income in Stockholm in 2024 is 46,600 kr pretax, meaning a two-person household could have afforded about 47 of these meals today (using BTChick’s 2k estimate) assuming their full pretax income went to Operakällaren meals.

Fourth, if you worked in service industry in Stockholm in 1968 – ranging from head chef to hotel receptionist – your monthly pre-tax income would have been between 1,235 ($239) and 2,300 ($445), meaning you could have afforded 20 to 37 of these meals, respectively – smack two of those together, and you’re roughly on par with that American two-person household I quoted above.

That is, in Operakällaren meal terms we are about as well off today as her grandparents were 56 years ago.

The affordability of a dinner at upscale Stockholm Operakällaren is about unchanged between 1968 and 2025, even though the numbers are much bigger.

This isn’t about prices going up. This is about our money melting away.

No, this is about monetary economics and reality. The ability to think through money illusion and unit bias. … but more importantly about wealth and income pushing up the relative price of nontradable services like restaurant meals in fancy downtown Stockholm establishment. In other words: if we rerun history with gold or bitcoin instead of fiat, the price of a night at Operakällaren would have seen ROUGHLY this change regardless.

Also, see what I’ve done here? I sidestepped the CPI convo. Much debacle about money comes through the exact price deflator used – the further back you go, the less it makes sense to use a price index (how do I quality-adjust for high-speed internet, electricity, air fare??). Instead, I compared likes with likes: prices of a real-life good (well, service) and the real-life incomes at the same points in time.

reductio ad absurdum comparison:

OMG I spent the night with my OG Bitcoin friend. He showed me a receipt from the summer of 2011 when he purchased a sofa for 5,000 bitcoin... Woah, like the world's most expensive piece of furniture. It really goes to show how hard seating asset are amazing; it isn't about Bitcoiners massively overpaying on sofas... since a nice sofa today would set me back 0.015 BTC... it's about sofa's CRASHING in value.

In this scenario, everybody understands that the number of bitcoin transacted is irrelevant without a) the dollar price BTC/USD b) what other prices are in the economy in 2011 (i.e., incomes vs sofa prices in 2011)

Same things go with fiat prices in the past. They must always be put in relation to other current numbers (incomes, relative prices); that's not different in bitcoin -- saying that you spent X BTC on something isn't an eternal, meaningful way of communicating value. Needs to be put into context, timeline, reference, incomes and real-world prices.

Fiat, as any monetary system, is a way to compare likes with likes; saying that you zapped me "generational wealth" for this educational SN post is funny (but stupid...). Because it isn't and wasn't generational wealth when you did it. (and you replace those sats by earning more and/or buying more with filthy fiat).

That's today's little money lesson.

Peace, /J

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92 sats \ 14 replies \ @CliffBadger 24 Oct

I don't see why income has to be considered. A meal at a nice restaurant used to cost 62 kr. If 62 kr can't buy a nice meal today, then the currency failed. Because if lunch today costs 62,000 sats, I can still afford lunch on 62,000 sats fifty years from now. That's enough to show that one currency works and the other doesn't.

100 sats \ 12 replies \ @Undisciplined 24 Oct

I think the point of this post is that even an inflating currency can still be functional as a medium of exchange. It's not more expensive in real terms to eat out than it used to be, it just takes more pieces of paper that are also easier to earn than they used to be.

I doubt you'll get any disagreement about fiat failing as a store of value.

42 sats \ 9 replies \ @CliffBadger 24 Oct

But the paper being spent wasn't necessarily earned in the same year. If I produce a nice meal and get paid 62 kr for it, but fifty years later I can't trade that same 62 kr for a nice meal, then the exchange is incomplete because it only functions either in one direction or within a limited span of time. That's why I don't believe MoE is separable from SoV. If a currency is only transferrable across space but not across time, then it can't fulfill the role that God intends for currency to play in an economy.

33 sats \ 8 replies \ @Undisciplined 24 Oct

They aren't fully separable, but no one is claiming they are.

Ultimately, a currency that fails to be a SoV will fail to function as a medium of exchange, because of the point you make: we accept something as MoE because it's value stores long enough to exchange it for something else of similar value.

As you say, it only functions within a limited span of time, but money tends to be spent if it isn't worth saving.

42 sats \ 7 replies \ @denlillaapan OP 24 Oct

we accept something as MoE because it's value stores long enough to exchange it for something else of similar value. hm... I don't actually think it matters. Both equilibria work:

produce for money, hold money the PP of which appreciates (like bitcoin) or stays the same (like gold), exchange money for other goods/services.
produce for money, pay bills and consume in same time period, shove surplus into gold/bitcoin/stocks, exchange gold/bitcoin/stocks for other goods/services in the future.

I can see pros and cons of both those scenarios, but it's not obvious that, like @CliffBadger claims, either of them "fail" as money. They're both facilitating trade, doing money's role.

75 sats \ 1 reply \ @CliffBadger 24 Oct

I count scenario 2 as a failure because it's using gold/bitcoin/stocks to compensate for a role of money that fiat can't play.

Fiat works as money in the sense that it's a liquid asset that the general public accepts for payment, and it works very well for particular aims and strategies. But it's not doing what money is supposed to do in the ideal capitalist sense. The depreciation in purchasing power is essentially a manufactured obstacle to free trade.

42 sats \ 0 replies \ @denlillaapan OP 24 Oct

That's sort of your value judgement.

You look up the definition of money, what you outlined as fiat fits that.

So, I disagree with your method/component but agree with your conclusion that it's a manufactured obstacle

33 sats \ 4 replies \ @Undisciplined 24 Oct

shove surplus into gold/bitcoin/stocks

That's just one version of the subsequent exchange that I'm talking about though. If the value were falling so quickly that you couldn't get a sufficient amount of gold/bitcoin/stocks, then people would stop using the currency as a MoE.

42 sats \ 3 replies \ @denlillaapan OP 24 Oct

Yes-ish... Historical record doesn't bear that out. We keep using money weeeeelll into hyperinflation. It certainly fulfils this role in the Western world, covid inflation aside

42 sats \ 1 reply \ @CliffBadger 24 Oct

They continue to use the same type of money, but they do assign a lower and lower value to the currency. So in a sense they do stop accepting it as a valid form of money, because they're not willing to trade it except by multiplying the volume by extremes.

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100 sats \ 0 replies \ @Undisciplined 24 Oct

I can't argue that people don't give up on their failing fiat as quickly as one might expect

reply on another page

42 sats \ 1 reply \ @denlillaapan OP 24 Oct

exactly.

also: THERE ARE REAL EFFECTS. Thank you for your attention on this matter

0 sats \ 0 replies \ @SimpleStacker 24 Oct

Thank you for your attention on this matter

👀

0 sats \ 0 replies \ @denlillaapan OP 24 Oct

no, this is wrong.

Put differently: This would be correct if we lived in an EXTREME planned economy where prices couldn't never reflect reality.

125 sats \ 0 replies \ @SimpleStacker 24 Oct

Yay den is back. Let's celebrate by posting provocative pictures of yesteryear prices!

152 sats \ 2 replies \ @Undisciplined 24 Oct

One quibble: since bitcoin is almost perfectly durable, it is relevant what it could have bought later because saving it was an option. That's the major friction in getting people to spend their bitcoin.

How does the tendency towards higher productivity factor in to your argument about this dinner being similarly affordable as it was over 50 years ago? Shouldn't everything be getting more affordable?

I think part of what's going on, that does relate to inflation, is that there's another side to the Cantillon story that often gets overlooked. Rich people and poor people buy different things. If rich people benefit from getting the new money first, the things they buy will also tend to increase in price first, which will make them relatively less accessible to poor people.

42 sats \ 1 reply \ @denlillaapan OP 24 Oct

I don't quite follow your quibble, please elaborate.
Yes, productivity should bring average prices down. But urbanisation + tourism + baumol cost disease makes me think that high-end downtown restaurants may reasonably charge higher real prices regardless. = Basically, they can sell to a lot higher-income earners today than in 1968... and don't face competition from low-wage countries since what they sell is nontradable

33 sats \ 0 replies \ @Undisciplined 24 Oct

The quibble is that generational wealth is inherently about future purchasing power, not present cost.

So, someone may (will) end up being wrong about 1000 sats being generational wealth, but it's not because of how much it's worth now.

33 sats \ 1 reply \ @nelom 12h

Zapped but haven't read yet, looks like a glass of red and a relaxing education 😎

42 sats \ 0 replies \ @denlillaapan OP 11h

appreciate it, SIIR

33 sats \ 1 reply \ @OT 24 Oct

Common... give the bimbo a break

0 sats \ 0 replies \ @denlillaapan OP 24 Oct

No breaks, always be closing.

33 sats \ 1 reply \ @zapsammy 24 Oct

"all knowledge is ultimately self-knowledge" ~ Bruce Lee same with Bitcoin! the people's mind is diseased and incapable of grasping the fundamental truths; they start their education from the outputs already provided by society, rather than from the fundamental inputs;

see, u will also never run out of material for such posts, because the amount of effort to correct the bullshit is exponentially higher than the amount of effort required to come up with bullshit...

69 sats \ 0 replies \ @denlillaapan OP 24 Oct

u will also never run out of material for such posts, because the amount of effort to correct the bullshit is exponentially higher than the amount of effort required to come up with bullshit... THAT'S WHAT I SAID THIS MORNING!

I read it and was like, FUCK Brandolini's law hits again

33 sats \ 0 replies \ @realBitcoinDog 24 Oct

Zap zap

61 sats \ 0 replies \ @Solomonsatoshi 24 Oct

Definitely understanding fiat money and more generally monetary history is the place to start when wanting to understand Bitcoin. The Bitcoin Standard does this very well although Ammous is rather more harsh on Keynesian economics than a neutral commentary would justify but perhaps we can allow some poetic license just for fun. The biggest problem I see in Bitcoiners general bias is in their near absolute rejection of the requirement for government to participate in the economy in order to promote wealth creation and prosperity- yet the history clearly shows that wealth, security and prosperity are all interdependent and all to some extent dependent upon the quality of government you have in place. Because Bitcoin has restored and enhanced the individuals access to monetary sovereignty by building upon the limited issuance model of gold most Bitcoiners then extrapolate from this inferring that all government is bad. What has really fucked up fiat and Keynesian model is the capture of western governments by bankers who have removed the Keynesian prohibition upon commercial banks issuing fiat debt finance to any purpose other than one that is potentially productive. Because most Bitcoiners only have a negative understanding of Keynesian economics they fail to understand that it has been subverted by bankers in the above manner and that Bitcoins true primary value is in providing a competitive alternative to fiat money. Bitcoin is itself a socialist-collective model- with voluntary inclusion and all participants treated precisely equally without fear or favour. Somehow Bitcoin and the general narrative around it has been captured and dominated by narrow-minded uneducated Libertarian extremists who do not understand the true nature of Keynesian theory, or Bitcoin.

0 sats \ 6 replies \ @Solomonsatoshi 13h

https://dialecticaldispatches.substack.com/p/the-ai-race-isnt-about-chips-its

'While Large Language Models get the public hype, the actual race is for the commanding heights of the 21st century: autonomous systems, national logistics planning, economic modeling, and advanced materials science.

People in Washington are terrified, and for good reason.

In the Cold War, the U.S. forced the USSR to prioritize military production over the civilian standard of living. China is now turning that same playbook back on America, but with a different weapon.

By forcing the U.S. to sacrifice its energy stability just to stay in the race, China is using its energy surplus to create a compounding technological gap that America’s fractured, high-cost grid cannot overcome. Yet, the U.S. has no choice but to stay in the game just as the USSR did during the Cold War.'

@Cje95 is looking worried.

2 sats \ 5 replies \ @Cje95 9h

Not worried in the slightest. I look at the grid considered the weakest ERCOT and all we have seen since the almost blackout is enormous surge in numerous power additions to the grid including battery storage.

The US wasn't trying to onshore for decades. We were retiring coal plants for renewables because it wasn't going to cause any grid issues. However, now the power demand surge has come and grid operators were still retiring plants without the necessary backup capability. So there were and are growing pains but we are addressing them. We are restarting power plants we need and breaking ground on others that will only help drive down the costs.

Not to mention we are getting ready to send off a data center experiment into space lol.

0 sats \ 4 replies \ @Solomonsatoshi 6h

this graph does not give you concern?

Nor this ?

Nor the overall argument given in the link?

https://dialecticaldispatches.substack.com/p/the-ai-race-isnt-about-chips-its

'China’s ability to cheaply and rapidly build massive energy capacity pressures the U.S. to pour its limited resources into a race it is ill equipped to pursue. And so, the U.S. is forced into a zero-sum choice where every gigawatt diverted to an AI data center is a gigawatt that isn’t available for rebuilding its domestic manufacturing base, or worse, one that risks destabilizing the civilian grid, spiking consumer electricity bills, and threatening blackouts.

While Large Language Models get the public hype, the actual race is for the commanding heights of the 21st century: autonomous systems, national logistics planning, economic modeling, and advanced materials science. People in Washington are terrified, and for good reason. In the Cold War, the U.S. forced the USSR to prioritize military production over the civilian standard of living. China is now turning that same playbook back on America, but with a different weapon. By forcing the U.S. to sacrifice its energy stability just to stay in the race, China is using its energy surplus to create a compounding technological gap that America’s fractured, high-cost grid cannot overcome. Yet, the U.S. has no choice but to stay in the game just as the USSR did during the Cold War.'

Wow - I didn't realise some in the government are so in denial of reality. Maybe you are just here to placate and calm the citizens who are still reluctant to acknowledge the empire is crumbling...

The US space program, and AI and 'onshoring' generally, is grounded, for the next decade, at least, unless the supply of rare earths from China is regained. China has already largely won the trade war, and USA, clinging to its legacy exceptional privilege, is only just beginning to realise it.

2 sats \ 3 replies \ @Cje95 4h

It's hilarious to me you think you can speak on how Washington feels with any sort of absolute certainty like you do. The US continues to build out and hook up data centers.

Vogtle was a first of a kind project. Those are always expensive and have issues that's why they are called first of a kind. For what it's worth your whole graph is wrong TerraPower started construction last year on their place in Wyoming and Oklo broke ground on two facilities one kn Idaho and one in Oak Ridge. You also have the Clunch River site and X-energy site that are currently under review. Plus DOE has 9 more projects breaking ground/have broken ground with three set to reach criticality by next July.

This doesn't even touch the microreactors that are being ramped up as well or the restarts going on. Those restarts are also under construction so add 3 more to the list. Suddenly it really changes the equation huh? This also doesn't factor in the fuel fabrication plants that have broken ground or the

It's not denial of reality its watching the private sector innovate. That's something China doesn't have at all they have to publically brag and boast but in the end only time will tell if they can outrun their debt crisis that makes the US debt issue look like rookie league. Population is falling their youth unemployment is wildly high… they stopped reporting numbers for a reason

0 sats \ 2 replies \ @Solomonsatoshi 4h

It amuses me that you think you can respond convincingly to an article you did not read or if you did you did not digest the content of. How deep does the denial of reality in Washington go?

'More importantly, China’s state-owned companies build only a handful of reactor types and they do it over and over again. Having standardization streamlines licensing, simplifies the supply chain, and keeps a dedicated, specialized engineering workforce, like teams of specialized welders, moving seamlessly from one site to the next. When China ran into the same problems with the American AP1000 design that crippled the Vogtle project, they didn’t give up. They studied what went wrong, tweaked the design, developed their own domestic supply chains, and are now building nine more of their own version, all on pace to be completed within five years at a drastically lower cost. As one consultant put it, “China is practiced at building really big things... and those project management skills are transferable.”'

This graph says it all really-

0 sats \ 1 reply \ @Cje95 4h

Yeah you mean stolen plans they didn't come up with anything and same with their molten salt reactors they took open source US government 1960s plans

0 sats \ 0 replies \ @Solomonsatoshi 4h

The denial is clearly deeply entrenched. The US didn't copy and paste the British Empires model of global imperialism, with Britain still holding your hand even to this day? Emerging empires have always copied the predecessor and pirated wealth from the declining predecessor. Why should China be expected to play it differently?

'And it’s not just nuclear. China is building out renewables capacity at a mind-boggling rate, and the latest figures are hard to even comprehend. In just the first five months of 2025, China installed 198 GW of new solar, blasting past the one terawatt cumulative milestone. The pace is staggering with 92 GW of that solar capacity having been added in May alone. As another analyst pointed out, that’s the equivalent of installing “almost 100 solar panels every second.”

Being the “world’s factory” means having your very own supply chain. For the first time last year, the top four wind turbine makers in the world were all Chinese. Similarly, China enjoys a majority market share in the manufacture and export of photovoltaic cells. As one analyst from the Asia Society bluntly put it, “When it comes to clean energy, it no longer makes sense to talk about competition. There is only one player. The U.S. is not even in the room.

As the U.S. cancels $22 billion in clean energy projects and sees wind investment shrink to a decade low, China is churning out the “wind turbines, solar panels and electric cars... all over the planet.” They aren’t just positioned for the data center boom; they’re the ones building and selling the entire energy infrastructure for it.

These lower energy costs ripple through the entire economy, compounding over time and creating a competitive advantage that could last for generations. Cheap, abundant power is a fundamental economic multiplier. Its effects reach far beyond the tech sector. It drastically lowers the input costs for all foundational industries: steel, cement, chemicals, plastics, and advanced materials. This, in turn, makes all types of manufacturing, from electric vehicles and batteries to the solar panels and wind turbines themselves, exponentially cheaper to produce.

With the cost of electricity becoming the dominant factor, China can effectively subsidize its entire technological ecosystem. While other nations are forced to choose between powering AI data centers or maintaining their industrial base, China is building the capacity to do both. The Chinese approach creates a virtuous cycle where cheaper energy allows for cheaper compute, which in turn accelerates breakthroughs in big data, machine learning, and even energy production itself. We’re already seeing this feedback loop in action. A research team recently used AI to control the ultra-hot plasma in the HL-3 tokamak reactor. By training an AI model, they were able to stabilize plasma in ways traditional, slower containment methods cannot. It’s a type of of a breakthrough that can unlock the next generation of power.

These advantages ensure that the high-value industries of the future will inevitably thrive and concentrate in China, where energy is cheap and there’s plenty of it to go around. It is a key economic advantage to unlocking the technologies of the future.'

0 sats \ 3 replies \ @035736735e 24 Oct outlawed

stackers have outlawed this. turn on wild west mode in your /settings to see outlawed content.