Things Should Be Getting Cheaper…

But the current financial system / experiment results in the total opposite.

As technology continues to advance at an unprecedented rate, it is becoming increasingly clear that it is a deflationary force that should be driving the cost of products and services down. Yet, despite this, we continue to see prices rise and the cost of living increasing. The reason for this is not due to technology itself, but rather the existing financial system that we operate within. In this blog post, we will explore why technology is deflationary and how the current financial system is working against it.

Firstly, it is important to understand why technology is deflationary. At its core, technology is about making things more efficient and cost-effective. Whether it is through automation, digitisation, or the development of new materials and processes, technology is constantly finding ways to do things better, faster, and cheaper. As a result, the cost of producing goods and services is going down, and this should be reflected in lower prices for consumers.

However, the current financial system is working against this deflationary force. The way our monetary system is structured means that inflation is almost inevitable. The central banks that control our currency supply are constantly striving for a 2% inflation rate (currently over 10% in the UK at time of writing), believing it to be the optimal level for economic growth. This means that even if the cost of production is going down, prices are still rising in order to meet this inflation target.

Furthermore, the financial system is designed to favor debt over savings. This means that consumers are encouraged to borrow money to make purchases rather than save up and buy outright. This creates a cycle where people are constantly paying interest on their debt, which in turn drives prices up as companies seek to cover the cost of the interest they are paying on their own debt.

Another factor contributing to the inflationary pressure is the fact that technology is creating winners and losers in the economy. Companies that are able to adopt new technologies and improve their efficiency are able to reduce their costs and drive prices down. However, companies that are unable to keep up with the pace of technological change are left behind and struggle to compete. This creates a concentration of market power among the companies that are successful, allowing them to charge higher prices.

In order to harness the full potential of technology and ensure that it benefits everyone, we need to rethink our monetary system and find ways to promote saving over debt, as well as promoting competition and preventing the concentration of market power.

However, with having global debt at ~$4oo trillion and considering if we could attempt to pay even $1 trillion of that debt back at $1 per second, it would take 32 000 years!!

The global debt + interest is unpayable at this point and we are in what is called a debt spiral where Banks are failing and insolvent and have to beg the central banks and governments for bail outs — effectively creating more debt that is passed on to the Tax payer, thus increasing inflation.

The system can’t be fixed from inside the system, therefore a new system is required to ensure the betterment of life and humanity for the 8 billion people on the planet…

Only with this new system can we then truly benefit from the deflationary force of technology and create a more prosperous and equitable society.

But what is this new system?

Simply put it is — Bitcoin. A decentralised economically perfected digital currency that operates on a peer-to-peer network without the need for a central authority or intermediary. Its underlying technology, the Bitcoin blockchain, is a distributed ledger that records every transaction made on the network in a secure and transparent manner. Every 10 minutes this ledger is self audited and time stamped so that it cannot be altered…This technology has the potential to enable the world to rethink our monetary system and find ways to promote saving over debt, as well as promoting competition and preventing the concentration of market power.

Firstly, Bitcoin can promote saving over debt by enabling individuals to have more control over their money. In the current financial system, banks hold our money and we are forced to rely on them for loans and other financial services. This creates a system where debt is encouraged and savings are not incentivised. However, with Bitcoin, individuals have full control over their money and can store it in their own digital wallets. This promotes saving over debt, as individuals are incentivized to hold onto their money and not spend it on unnecessary purchases.

Secondly, Bitcoin can promote competition by leveling the playing field for businesses. In the current financial system, large banks and financial institutions hold a significant amount of market power, which can lead to anti-competitive behavior. However, with Bitcoin, businesses can access financial services without having to rely on banks. This creates a more level playing field for businesses, as they can access the same financial services as larger companies, which promotes competition and innovation.

Lastly, Bitcoin can prevent the concentration of market power by enabling individuals to transact directly with each other. In the current financial system, intermediaries such as banks and payment processors have a significant amount of market power. This can lead to high transaction fees and other barriers to entry for smaller businesses. However, with Bitcoin, individuals can transact directly with each other without the need for intermediaries. This creates a more decentralised and democratic financial system that prevents the concentration of market power in the hands of a few.

In conclusion, Bitcoin has the potential to bring the world into a decentrailsed, fair and transparent monetary system that can promote saving over debt, as well as promoting competition and preventing the concentration of market power. Its underlying technology, the Bitcoin blockchain, because of its Proof Of Work method and Difficulty Adjustment mechanism, creates a more secure, transparent, and decentralised financial system that empowers individuals and businesses alike.

With so much change and global economic distress, this could well be Bitcoins time to bring in a much needed solution, especially in an increasingly technologically driven world as it aligns with and enhances equality of opportunities and living standards across the world.

Alan