Currently, all money is supposed to represent capital, hence why it seems to make sense that printing more money will reduce the value of each token / dollar printed, each one should in theory actually represent less capital. Hence the term dilution of capital.
Capital, when we think about it, can be many things, including debt.
Debt, in theory, is exchangeable for capital, therefore it should just represent capital.
But capital in theory is a fixed amount, it is supposed to represent all fixed assets on Earth, including things like all gold, all oil, all land, in short, anything that can be possessed.
That is whilst we are both consuming, and producing.
We consume energy, and produce pollution, mostly in an irreversble way, whilst reducing the stock of capital.
Therefore the stock of capital is reducing, relative to the money representing it.
One could say we are adding a certain value to the world, by changing it towards producing more of what we consume, as well as things we consider desirable, all of which we are happy to exchange money for, like useful infrastructure, land which produces food, employs people, and of course art, a much appreciated output of humanity.
But the other thing we produce is pollution, an awful lot of it.
In fact so much so, it is altering the amount of energy our planet absorbs from the sun, by some of our pollution depleting the things in our atmosphere which used to reflect more sun energy than it does now.
Now we are seeing things never seen before, things like heat domes, which reduce our appreciation of our environment.
Appreciation is value, how much we are prepared to pay for things.
We are starting to literally burn, and we don’t like burning much.
We would pay anything to avoid that.
What I am saying here is the idea of equating money to a fixed supply of anything is actually made a nonsense of, by the complexity of life.
There is no connection, not really.
Money is only as useful as what it can buy, which is heavily dependant on how much of it we each happen to have at our disposal, individually, and what is available to be purchased by it.
Everything else is just noise.
So a five year old asking why don’t we just print more money is probably wiser than any adult trying to relate the value of money to capital.
The thing that needs fixing, is the thing starting to burn us, the change of absorption of energy from the sun.
Fixing that, is probably the most valuable thing we can imagine.
The only way it can be fixed is by use of that energy from the sun.
We need to begin consuming it, instead of the energy previously absorbed by the sun, which created everything we’ve consumed so far.
That is the real thing that needs to be balanced, with the value we consider in money.
The sensible thing to do is to stop trying to equate money with capital, and start to equate it to live energy.
Not the energy already used to create all capital, but the energy which is actually creating the capital of tomorrow.
That is our real deficit, it is an energy deficit to our planet, which can only be paid back down by using wisely the energy of the future, which comes exclusively from the sun.
We will do that automatically when we switch from equating money with existing capital, to the energy of the sun.
It is happening already with solar powered proof of work tokens, like Bitcoin.
Very soon we’ll see it makes perfect sense for every one of us to print free money forever, as long as it is backed by sunlight, we can’t go wrong, that will be the most valuable form of money we can ever know.
Instead of a gold standard in oz per dollar, for example, a solar energy standard in Watts per dollar makes perfect sense.
In the case of Bitcoin, we can actually calculate 1MW per Bitcoin.
Anyone interested to see how can find in some of my other stories, search out “Kardashev Hinge”.
