Soft Money Generates Soft Solutions

in LeoFinance5 months ago

Hey Jessavers

As money printing continues to be the only solution to all our problems, two camps have stood up and called for a different playbook. The gold bugs and the Bitcoiners, while they seem to be at each other's necks on Twitter, are both part of a similar belief system, a system of scarce, hard money.

Hard money is a type of money that is not easy to produce; it must take value to produce and is limited in its creation and supply.

In a hard money system, credit is only extended based on collateral, so while there is debt in the system, it has a natural limit and has value backing its new money creation.

Focusing effort in a hard money system

When you have hard money, any effort that can be done that cost less to create money but earns money is valued. So Instead of trying to pull a bar of gold out of the ground or mine a Bitcoin. I'd much rather try to offer value to another who would pay me in hard money; this increases the velocity of money over time.

The harder the money, the lower the supply, the tougher it is to make the higher the velocity, the more value each unit of money creates and spreads abundance much faster and wider than in the current system.

In a hard money system, people are encouraged to have savings, the value they hold isn't debased and cannot be taken through government-mandated inflation. Goods, services, trade become more efficient because we have a peg to measure it by across all value chains, and therefore misallocation of capital is reduced.


In times of crises

In a hard money system, people would have savings; they would live without assistance, governments and private charity would call for aid from the wider country and local communities, people would retain their independence and power.

Capital will be decentralised. Therefore, it can be applied in a more nuanced way on the ground where it's needed. Not waste a penny on administrative costs, fraud and overinflated salaries of bureaucrats.

Soft money makes soft people

As the money supply continues to get diluted, as savers are stripped of their purchasing power, they become dependant on the government or the banks, in the form of debt. The more dependant they are, the less chance of revolt, the easier they are to control, you won't bite the hand that feeds you.

The softer the money supply becomes, the softer the people become as we push more people into a neo-feudalistic system. Soft money has its uses don't get me wrong, it's great for financing assets as your obligation decreases over time to replay back cheaper fiat each year.

However, it's no store of value and this is the mistake the vast majority of the world is making. Until the penny drops and people understanding saving in fiat is harming them, then the soft money society will continue to decay without government assistance.

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

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LotS of bank now days are charging negative interest. So you have to pay the fine if you are saving. That’s opposite of that we have been taught by our parents. Maybe savings in banks is not the best option these days

Where I am the banks are also charging "administrative costs" at the moment for a savings account, which is higher than the interest you get in return. If you're someone who doesn't save every month, the chance is that you'll end up with less than your starting capital. So indeed, that's not what we were taught as children, that saving in the bank was the way to go.

The only thing is, what's safer than a bank? It's also not advisable to keep cash stashed at home.

That is horrible, perhaps look at your bank's products, if they have money market accounts or index funds you can get into attached to your account, perhaps that's an option, just to cover the fees and inflation so you don't "lose" your purchasing power

Other than that, storing physical gold or silver, some banks also allow you to purchase gold through them and store it but watch out for the storage fees.

Stocks are an option, you'll just have to pay your capital gains tax on sale or dividents, so make sure that's inline with your tax bracket or you could be taxed more

Then finally Bitcoin, which is what I am doing, not out of choice but to me it's really the only option I have left

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Thanks for the advice and options given. I appreciate it 😊
I was definitely going to look into the options of the banks here and we were indeed thinking of investing. We only need to do our research first.

Yes that's correct, and even if you're not getting nominal negative interest rates, you still could be in negative territory due to the fisher effect, if inflation is higher than you're savings right, then, in theory, you're in negative interest on your savings, which is whats happening here in South Africa.

It's completely the opposite of what we were taught and its a cash grab of note, which is why I am confident in Bitcoin, as long as this path continues

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Gen X and boomers could gain interest on savings. Millennials and Zoomers are left holding the bag from past government defecits and unfunded liabilities, our savings earn no interest unless we gamble in the stock market, and the economy has been rocky for the past two decades. But no, we're just lazy, right? And now the internet and crypto are being subjected to arbitrary regulation by the government that has been screwing us over for all of our lives already.

They reaped the benefits of free markets and then decided that protecting what they got at all costs was the best thing because they don't want to enjoy free competition when they're on the losing end of the trade

The savings argument is the best tool I have in my arsenal at the moment to show to my friends/family that having 0.01% interest rates on your savings vs at least 4% on BTC savings to convince them to "opt out". They still are convinced the government will sort them out but I'll just keep preserving my savings in the mean time. Little did I know we'd see such a crazy rise in value of BTC since the big crash in March but it's a nice bonus! Even if BTC stayed at $4k and I'd get the 4% interest, would still be fine with that!

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Lol, I couldn't get through anyone wants to hear a damn about savings, they want to buy high and sell higher, wealth without work and instant riches and then blame it for being a bubble.

I mean what's not to love, if it goes down I get a bigger sat position for my 4% interest, if it up I get more purchasing power, how can I lose?

The power of compound interest is amazing, he who understands its benefits, he who doesn't pay the interest. BTC is a purchasing power blackhole and we're just gobbling up the worlds purchasing power like it or not

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Haha, yeah I've seen that argument as well about "I wish I bought some in the March crash" when I was telling them that's exactly what I'm doing, spent every last penny I had to get the amount I did then and they are still ruing a missed opportunity. It's now "too expensive" for them to buy and I'm like, you've not been listening to me have you?!

Lol yeah, that's the win-win situation, obviously the whole "not your keys" thing with CeFi is the issue and not covered by FCA but just use it to get your foot in the door and realise BTC is not some dark art! These CeFi companies are in a period of growth so not going anywhere unless some serious shit goes down.

My fiat has long gone past the event horizon of the BTC black hole, no chance anything is escaping from that now haha!

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