the money=energy equation

money is not like any other good, responding to supply and demand in the economy

i will explain

stand 100 men in a circle, give each man a shovel and access to 1 million dollars each, in cash behind him— -with the rule that he can only spend his money buying dirt, and cannot leave the digging circle — if he leaves, he forfeits his money — and remember — he only has a shovel, nothing else

Imagine them fenced in.

each man starts digging a hole

he sells his dirt to the man on his left

and buys dirt from the man on his right

each man tries to dig faster than his neighbour in order to earn more money by selling it. it becomes a digging race. But that burns energy faster

each man piles money up

this goes on for a few hours, then one man starts to tire, then another and they drop, exhausted and hungry. Gradually they slow down. There is no food and drink within the enclosure.

They try eating money — but that doesn’t work, it doesn’t convert to muscle energy

pretty soon, there are so many gaps in the circle, carrying and selling the dirt takes longer than digging it

Eventually all digging stops. They are desperate for food (more energy)

At that point the money supply stops, because there is no energy in the system to give it value. Each digger requires ‘energy input’ in the form of food, to continue digging. They cannot buy food within the enclosure, although the accrued total is $100m — — -The food must be supplied by an external source, to ‘underpin’ the energy output expended by digging within the closed circle

It isn’t possible to transfer the energy from cash (peso to bitcoin) directly into food /energy— there must be intermediate functions

Owning bitcoin has the same problem — theres no energy in the system to back it up

co-author of The End of More, in paperback and kindle on Amazon email

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