One of the things I notice from Saifedean Ammous's The Gold Standard and his views about credit creation and money e.g. here
https://youtu.be/Tb3soXtRqSw?si=OfvINYGYKNqFiy1M
is that he 100% believes that on a hard money standard, interest lending goes to zero everywhere and increased capital accumulation alone, increased wealth and prosperity, and declining time preference can finance everything.
Many Bitcoiners likely share this same view.
In the link shared, he seems to intimate this is why he likes the Islamic banking system which, fundamentally, is against usury (he doesn't say it explicitly), and while speaking of which is more moral, he concedes that despite the force of the gun that aids finance social services via taxation, it is far more moral than the hidden tax of inflation / credit creation --> the twin system behind a world where everybody and every organization today is in debt.
Imo, Saifedean thus has a better framework for a utopian world than Elon Musk who thinks simply building robots will eliminate poverty. If the robots are built in a fiat system you can be sure we're heading the direction of Star Wars and not Star Trek. Or worse. If they are built via capital accumulation on a hard money standard, then they will provide even more capital accumulation which will be shared freely as gifts (remember, no loans) while the need for taxation and, in many respects a big centralized government itself, declines.
The original idea of Adam Smith of capital creating more capital. True capitalism.
However, let's flip from this ideal
hyperbitcoinization vision to see what fiat actually says.
To steelman the case for fiat,
think of the wonderful things that fiat has financed in record time.
Assume we were on a purely hard money standard, perhaps in some extension of Saifedean's timeline created in The Gold Standard,
where the financing of any major projects e.g. building an AI lab, required either taxation or something like a global Geyser / Kickstarter crowdfunding mechanism. Now in the real world, AI as a field was started in 1956, and if the dream then was to build ChatGPT then there were at least 70 years of frustration that, more than anything, needed the technology of processing chips to mature and for the internet to exist, and self-kickstart the knowledge cache that will be needed to train AI on advanced processing chips.
On a fiat standard, this has been financed as government research through credit creation more than taxation (the gold standard was officially ended in 1971 but the fiat standard of credit creation actually started in 1913).
What other things have been financed by debasement of currency via credit creation?
Yes, Wars.
But when the Prince is happy on drink and the charms of his women, there is no war and he is listening to his smart aides, why not indulge in credit creation so as to build a Sistine Chapel, a Pyramid, a Rocket to the Moon, A Satellite Internet System, etc.
This is why fiat exists in the first place.
It is a tool of power that the powerful reach for first, before they go through the boring ordeal of taxation.
In a narrow sense, fiat is simply paper money created on a whim to satisfy the aims of some bourgeoisie. But the word "fiat" originates from Latin, meaning "let it be done".
Fiat is the original decree and paper fiat money actually started as the printing of decrees on paper and handing then out to the populous in places like Imperial China.
Credit creation can also be seen as the
accumulation of favors in the dynamics of power play. So not only the Prince, but also his aides, could create money via credit and why, prior to the idea that money can only be created by the state, money could be created by anybody who could be trusted as documented by Nick Szabo on his blog (a trust minimized system since there were many players. If A's fiat money is debased, then A runs of out business and trust and B gains more clients as his money is still trust worthy.
What we have created with our global debt system is a trust maximized system. Held together more by the threat of nuclear fallout -- which would definitely kick the can many centuries into the future -- than by the desire to actually do business with people different from us.
Thank you Oppenheimer for creating the perfect debt glue. I see a quadrillion in debt easy. Who'll be keeping track of the debt obligations? No idea).
Pardon the digression, but you see my point.
Fiat can be extreme, as it is in our case, but it's emergence is very much organic and for most of human history, nobody understood very well what a hard money was. But they understood imperial decrees and power.
Now that we understand hard money, humanity is going to look carefully at fiat to see how it behaves, but to make it go away will be a tall order.
Finally, fiat and credit creation is done by us all and we all love to offer interest because nature can either mess our plans or kill us.
We offer interest because we want other people to take us seriously, because it is a form of insurance against calamity, and because we are mortal.
Consider again that purely hard money standard.
If one be it an individual or company or government had accumulated, by sheer good will and earnest labour, 10 million bitcoins, the idea that they should simply give some away to some noble cause e.g. build a futuristic hospital that will take so many years, feels like throwing gold to pigs.
If those without are not, in a way, held responsible by the demand to pay back this money, they might waste the gift given to them yet one is mortal and besides, maybe they wanted to build themselves instead a robotics factory.
The people being given a decree cannot respect it if it is politely given. Machiavelli 101. So in a way, people seem to expect fiat to exist if they are to ever respect their Princes at all.
In the end, the first decree came from God himself.
"Let the world be created"
It is at the end of our prayers too.
So every King is playing God when they debase. "Let x be funded".
Bitcoin will temper this fiat. Like the voice of reason that keeps the Prince from risking the wrath of his people, lest they hang him for taking them to hell.
Alas, the only way to learn our lesson to be moderate, and the only way our Princes will learn to keep their egos in check, is to rack this up to sky high levels first.
Let it be done.
China has won the trade war and now USA cannot fight a military war of any scale because China holds the supply of refined rare earths required to fight a modern war...
Its not all about the monetary system but about the quality and strategic intelligence and sense of purpose of your government.
Western governments have been taken over by parasitic bankers and corporate lobbyists who rentseek and squander fiat debt issuance to inflate non productive speculative assets but fail to invest in productive industry and infrastructure.
China has won the trade war and now USA cannot fight a military war of any scale because China holds the supply of refined rare earths required to fight a modern war...
USA has 5k nukes China Has 500+
"I'm not afraid of the man who wants ten nuclear weapons, Colonel. I'm terrified of the man who only wants one."
-The PeacemakerHaha!
Never listen to Nicole Kidman, except when it's about nuclear weapons. lol
Hahah that movie was okay. I’m shocked you quoted it haha movie was mostly forgettable for me
It was a smart thing to say. I try to remember smart things. Had to look up who said it though. lol
I agree!!
https://archive.ph/4AYHm
Any war between US and China cannot be a direct full blown nuclear one as that would result in guaranteed mutual destruction.
Instead it will be, as it already is, one mostly fought via proxies.
One fought using hardware and tactics which inherently require refined rare earths USA does not have supply lines for.
The US needs to keep leveraging its intellectual capital (not dollar hegemony) to remain the leader in cyberspace and internet marketing and entertainment so that in case of a war, it has more allies than China.
Having more weapons might seem like a winning move but if one has no true allies, they lose.
Ref: The defeat of the well stocked Nazi army.
People fight wars, not guns and weapons. Not even an army of drones I'll argue (they can be hacked).
China has no interest in fighting the USA and the problem is America's debt problem. Seems like there'll be a lot of trade wars on the road to $1 quadrillion in debt. After which point people will maybe realize this is all crazy and they will stop chasing the high of debt cocaine. Maybe we will go back to being religious and to looking to the stars, and to having kids and not not bothering with overpriced fiat school when trade skills are everywhere.
There is no nation on earth that can fight a modern war without the supply of rare earths that are essential to the manufacture of most modern warfare materiel.
Any war between US and China cannot be a direct full blown nuclear one as that would result in guaranteed mutual destruction.
Instead it will be, as it already is, one mostly fought via proxies.
One fought using hardware and tactics which inherently require rare earths USA does not have.
USA has already lost that war for at least the next ten years as it cannot re supply itself or its allies.
USA has lost the ability to make and supply things- its neoliberal financialisation has crippled its capacity to fight a war.
US military industrial complex has lost already- just sad and tragic most of its citizens cannot see that or accept that yet- even if Trump already knows it.
@Cje95 knows it too- just that he cannot admit it because hes paid not to.
Of course it's all about the monetary system. As long as there exists a money printer, someone with access is going to keep pushing the print-money button until, first gradually and then suddenly, it becomes worthless for everyone else.
See this is why the Japanese are smarter than you. You apparently can't look at a system objectively from an engineering perspective. You have to filter every idea through the Opium Wars no matter how irrelevant it is to the problem at hand.
Japan is monetarily and militarily subservient to the US.
view on www.youtube.com'You have to filter every idea through the Opium Wars no matter how irrelevant it is to the problem at hand.'
That is about as classic a sly misrepresentation of what I actually say as I have seen- The Opium Wars are a very good place to start for arrogant ignorant US exceptionalists who have no ideas whatsoever what China is, but it is only a starting point toward understanding and certainly not a filter.
A money printer is a money printer. There is no strategic or sensible way for a government to print money. It always ends badly for everyone except the few people who live close enough to the printer to buy their way out of the consequences. There is no need to investigate the specific justifications for why a government prints money or what it spends it on.
It would be better if the government used the money printer for hookers and blow. Spending it on programs to build a utopia is so much worse.
Compared to what? How did the non-money-printing scenarios end, for the nations (who?) who maintained them?
Basically everyone would afford 100 times as much stuff from working half as many hours.
In war fiat enables the combatant nation states to leverage all of their citizens monetary wealth toward victory.
The same applies in a trade war.
China and USA are already engaged in such a contest.
The dollar is losing because the dollar has been squandered upon inflating the price of non productive assets while the Yuan has been directed toward to building of productive supply chains and infrastructure.
USA cannot make useful things anymore.
It cannot make the hardware required for a modern war.
Rare earths for example.
To win you need to print and spend on useful things and USA didn't do that.
Trump is trying to turn that around now but its almost certainly too little far too late.
Why bother having a currency at all then? Just issue everyone an order on what they should be making, and then you'll have a perfectly efficiently economy. That's what taxation/inflation is.
Because China operates a mixed economy with state direction of strategic capital and a highly competitive private sector and labour market underneath that.
It is a hybrid of socialism and capitalism- state capitalism.
The private sector benefits hugly from such things as low cost electricity
Combining the best of both and demonstrably now out competing the wests crony capitalists.
In other words the parasite knows not to kill the host.
I'm closing on 13 years in and I am still not convinced that that is ideal. If the standard (which is always by decree) is Bitcoin, then what... shitcoiners become the cool rebels? I remain of the unpopular opinion that Bitcoin does best when it is optional, not mandatory. Fuck standards, embrace best practices to solve your problems.
Educational effort > standardization effort?
One point that deserves further emphasis is that fiat’s ability to accelerate timelines on large projects is not just a historical accident but an embedded feature of how centralized power and debt interact. The examples you gave from art to technological milestones highlight this. Under a purely hard money standard those same advancements would be throttled by the pace of capital accumulation and the alignment of voluntary funding. The result would be fewer monumental leaps in shorter time spans and more incremental progress spread out over decades centuries even. Whether that outcome is better or worse depends on what you value more speed or sustainability.
The persistence of fiat should also be understood in terms of psychology. Credit creation and decrees work because they tap into the deep social structures of trust and authority. People are willing to act under fiat not necessarily because the money is intrinsically good but because it represents a claim backed by a powerful issuer whose reach and capacity are visible. Hard money offers a different kind of trust one rooted in math and scarcity but it does not align with the traditional power dynamic that most societies have operated under for millennia.
Where fiat debt capital issuance is directed by a government in a manner that advances the development of improved wealth and security of its citizens then it can be a good thing.
Where fiat debt capital issuance is largely captured by private bankers who ignore the requirement for fiat capital to be directed toward such purposes then you have a state of crony capitalism that is inequitable and vulnerable to competition from a nation exercising more principled application of fiat capital leverage...
This is in large part how China has won the trade war and crippled the US military.
Parasitic bankers have captured western governments under the neoliberal ideology and the result is the decline and probable fall of western civilisation.