Economy

Statements on the Economy

STATEMENT

> Money is a claim on Energy - Debt is a future claim on Energy

With the discovery of fuels to advance human civilization, humans have globalized trade to increase growth. To continue growth and wealth, human society is using more debt to accomplish this.

Any source of money (Digital, gold, hard cash, crypto - is a claim on Energy). The value of money depends on how humans can obtain additional energy to increase wealth and maintain previous wealth. Since the system is leveraged and fiat currency does not have physical tethers, money is just a claim, NOT a guarantee to receive the full value of the claim. Every claim (no matter what source of money it is) requires energy - resources to claim.

RISK

If the energy becomes to expensive on an EROI basis, this will dramatically impact money in human society

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IMPORTANT QUICK NOTE ON MONEY

There is a lot of discussion about government and their budgets in the news.

Two quick notes:

1. US Federal Government is not like a household. The issuer of a currency has much more power than a user of the currency. The implications of debt on the US government is different than the debt of a state, a county, a city, a corporation, or an individual.

2. Money in circulation is in someone's pocket. To take away money from US government spending has implications. As does excessive spending.

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STATEMENT

> More leverage in money claims, along with more claims on money (debt, derivatives, various sources of claims - crypto) against a world of higher extraction costs of energy and resources, has huge implications when too many people want to claim that money

As seen during the Financial Crisis of 2008 and 2009, when too many people wanted their money, it put the whole financial system at risk. Renewed confidence restored order and stopped the excess demand for cash from the banking system. However, the risk is still there on any given day.

Another risk to mention is the speed at which this can happen. During the depression in the 1930s when there was a run on banks, people had to physically go there. The speed at which institutions can demand money is at a level exponentially faster than 100 years ago. Like so many risks with current change, the speed at which change can happen cannot be overstated.

RISK

There is a lot of leverage in the system. This leverage brings advantages to society but also brings tremendous risk. A leveraged asset at 25 times will dramatically drop in value if the claim as seen as not worthy of its valuation. Multiply this downfall of one asset by many and you can see how a society leveraged is at risk.

Another important risk we are monitoring

As big money realizes the leverage of fiat extremes, they will seek assets away from fiat assets into more reliable assets. This is happening now and can possibly accelerate at higher speeds. Example - private equity buying up homes, food, water, etc. The basic necessities of customers and employees. This will impact the approach avoid behavior of individuals.

STATEMENT

> Fiat and other currencies like Crypto depend on confidence/positive perception

As mentioned within the Financial Crisis, confidence came back and saved the day. People are not trading gold coins. A paper US Dollar requires confidence of its worth. Add to that all the leverage of the banking system, corporate structures, and institutions. It all requires confidence.

RISK

To maintain fiat leverage, confidence in the system has to pushed up constantly. On its basic surface, that is a risk. When confidence is is not warranted, this provides a lot more risk.

STATEMENT

> The US Dollar is the Reserve Currency and its power comes from the world purchasing it and its continued use. Countries and businesses moving away from the US dollar will have large implications for people within the US and elsewhere

As will be discussed in Statecraft within the Global Village Section, the US will continue to use its resources to defend the use of the US Dollar around the world. This will continue to impact trade negotiations and businesses operating within and with businesses in the US.

RISK

Businesses in the United States benefit greatly from the position of the US on the global stage. The strength and use of its US currency over others allows the US to do more leverage (more activity, more wealth). As the math of the globe is changing and impacting the US currency, this will have implications on US businesses.

STATEMENT

> The increased demand for goods and services from a growing world population combined with higher extraction costs and other factors (supply chains, more money in the system, etc.), will make the relative costs of goods and services higher

Higher prices for goods will depend on where the buyer and sellers are at along with the type of good. In general, prices will continue to rise (in general to individual budgets) due to the math.

RISK

More people in the world wanting more things is a risk to the cost. This is especially the case when considering that EROI is getting lower, the cost of extracting resources rises, the leverage of debt where interest payments are becoming a larger part of budgets.

Putting all of the above together in risk analysis

All of this together impacts customers buying and employee performance. Inflation, interest rates, economic growth, future risk, etc. The brain predicts and attempts to understand all of these to survive both physically and within culture (thus, whether a person buys your product and/or services).

ECONOMY

Statements on the Economy

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ECONOMY

Statements on the Economy

Economy News

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