10 sats \ 1 reply \ @skreep_ 22 May 2023 \ parent \ on: ∞/21M > $ × ∞ bitcoin
You're clinging to this idea of "income generating assets" as if it's the be-all and end-all.
That's a notion born out of our deeply flawed fiat money system. It's got most people believing that the only way for their wealth to grow or at least maintain its value over time is to hand it over to someone else, like a bank. That's the real trap here.
Why? Because in this scenario, YOU are the real income-generating asset. You dutifully deposit your earnings to a bank every week, and then what? The bank owns your money, and approves or denies what you can do with it and when.
If your money wasn't constantly losing its value at a rate of 5-10% per year, you wouldn't even be looking for these so-called "income-generating assets".
Also, let's not forget that nearly all "income-generating assets" bleed value in some way or another - property taxes, management fees, insurance costs, expense ratios, counterparty risks, you name it. Not to mention, equities are a gamble, dependent on companies consistently outperforming competition and staying relevant in an ever-changing market.
And the whole ∞/210M concept doesn't cut it either. You're accounting for 189M Bitcoins that will never exist. We'll only ever see ~20M in circulation at most. So, your percentage analogy falls flat. Money is indirectly traded for property ownership of goods that we assign costs to consume or costs to utilize.
Look at it this way. In Jan 2012, I couldn't have even bought a $150,000 home with 10K Bitcoin. But if I held onto my Bitcoin and didn't buy the house, even if the home's value increased tenfold by 2023, my Bitcoin would have appreciated even more. This is the true power of Bitcoin and the core of the what it means have a deflationary currency in a future where we will almost certainly be experiencing significant economic deflation due to technology and AI. If the price of everything is going down against bitcoin, and if I already have a home to live in (utilize), and I'm not trading 25 bitcoin for a second property for me to manage and maintain.
People will still need homes to live in, but they will not need or want to have 10 investment properties to maintain and manage to store and maintain their wealth over time. They will store their wealth in their money that works properly. This reduces market for homes down to people who want to live in homes only, not profiteer from land ownership.
Don't even get me started into debt leveraging where they buy up land with money pulled out of thin air, and then rent it all back to you, the income generators, while inflation grows their assets values and shrinks their debts, so the cycle continues.
Here's a hard truth - if you truly believe that you should be storing all your wealth in income-generating assets, then you are an income-generating asset.
In a world dominated by technological innovation, the cost of most things will boil down to production costs. Companies producing low-quality items will vanish because an informed consumer, understanding that their money will increase in value over time, will demand products providing long-term value. So, in essence, cheap money breeds cheap goods, and vice versa. I strongly recommend you check out some of Jeff Booth's work to gain a better understanding of this concept.
I'm sorry if this comes off a bit blunt, but it's a complex idea that's hard to get across. I hope this clears up my stance.
“fiat mindsets” have nothing to do with the point i’m making.
look at the world on a gold standard… there was a certain amount of gold in the world (ignoring the ~1% inflation), and that gold only represented a fraction of the world’s wealth.
the rest of the world’s wealth was stored in income-generating assets (homes, cars, stocks, bonds, land all had non-zero values 100 years ago).
those assets may have even been denominated in gold… but they weren’t actual gold.
i understand the effect of money printing on an economy, i’m not arguing that though… what i’m arguing is that even on a sound money system, money will only ever represent a fraction of an economy’s wealth.
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