Easily printed money obscures our view of assets and the real wealth production system in both:
Those in control of the printing presses inevitably print more than they should and repeatedly take much more than the value of their contributions.
When we clearly understand how the productive commercial economy works, we’ll be much better able to understand how to put it in sync with the biophysical economy in which it operates.
I propose a superior crypto currency – the DafiDollar. Instead of using a huge amount of electricity and computing time to be awarded a Bitcoin through a lottery system, the DafiDollar is awarded to those who dig up and fill in holes.
Dig-up And Fill In – DAFI.
Like the Bitcoin, the DafiDollar is ultimately pure wasted effort and creates no value. But unlike the Bitcoin, the DafiDollar does have some value at some point in the process when a hole has been created as well as a pile of dirt. Both of these could have value to someone, somewhere.
However, when extra energy is applied to throwing the pile of dirt in the hole - to merit the awarding of the DafiDollar token - the real value of the currency becomes equal to that of any other crypto currency, which is to say exactly zero.
Asset inflation is not wealth creation
Pumping up valuations and printing money to match the higher valuations creates debt for most people and profits for a few.
Printing money adds no value but claims on real wealth increase. Inflation ensues. This is a tax on the productive by the unproductive.
The Pump and Print Ponzi is Counterfeiting
We need enterprises which produce real goods and services and pay the full associated environmental and social costs before they turn a profit. This is a Free Productive Enterprise system.
The finance sector is a support sector and produces no real product. Its administrative job is to see that the productive sectors of the economy become more productive. Currently, the finance sector has become a money making sector for those who control it and parasitic overhead for the productive real economy.
The Fed pumped “liquidity” into the economy i.e. demand notes, rather than increasing production capacity. Asset inflation ensued. Is this a surprise?
Raising interest rates increases the cost of investments which would offset some of the real cost increases.
Resource depletion increases real costs as we must do more work to get lower yields. This also applies to food, minerals, forest, fisheries.
We need to differentiate between real cost increases and shooting-ourselves-in-the-foot money printing inflation.
