|
|
 |
They Can Always Print More Money But We Can't Print More Time February 27, 2021
Is that really what you want to spend your time doing, paying higher taxes?
"No matter how much money I make, they will always print more. I can't print anymore time." The source of this quote is correspondent T.D., who shared the story of an acquaintance of his who was offered a high-paying and very demanding corporate position that would have left him nominally wealthier in terms of money but much poorer in terms of time and energy remaining after trading away the bulk of his time and energy for the higher pay. The acquaintance turned the position down and cut the number of hours he was working, with this explanation: "No matter how much money I make, they will always print more. I can't print anymore time." The point here is that central banks and state treasuries can always print more money, a process which reduces the purchasing power of the money they've issued. We can trade more hours for more money, but this extra money buys less. No matter how much more of our time we trade for more of this created-out-of-thin-air currency, we will never be able to overcome their power to create near-infinite currency, which put another way is the power to devalue the money we trade our time for and thus devalue our time. This is an asymmetry that should inform our decisions going forward: They Can Always Print More Money But We Can't Print More Time. In other words, they can devalue the money we trade our time for at will but we can't create more time. As catalogued in the monumental history, Global Crisis: War, Climate Change and Catastrophe in the 17th Century, the history of governments' response to crisis is depressingly repetitive: virtually without exception, every government devalues its currency in response to the soaring costs of conflict (and placating elites) and the concurrent plunge in tax revenues. The common experience seems to be that the government-issued money loses 90% or more of its value. In the era before central banks could create trillions of dollars with a few keystrokes, this was accomplished by recalling silver or gold coins and replacing them with coins with little intrinsic value. In the case of the mighty Ottoman Empire of the 1600s, the empire recalled all copper coins ("small money" used for everyday transactions) and restamped it at a face value triple the old value, in effect wiping out two-thirds of its purchasing power. Diaries of commoners in every regime not shredded by war record that the 90% devaluation of the money was just as devastating as the floods, droughts, food shortages and soaring taxes that were all part and parcel of the official response to crisis. That money is losing purchasing power faster than we can earn more of it is a fundamental transformation. In the good old days of two generations ago, making 25% more money still added purchasing power to our incomes, even after deducting 5% for inflation (laughingly estimated at 2%) and another 10% in higher taxes paid because the extra income pushed us into a higher tax bracket. We still netted an additional 10% of purchasing power. But if history is any guide, then we can anticipate 20% inflation (grossly underestimated by authorities to avoid outright revolt) and 20% higher taxes (often hidden in higher "user taxes" and other flim-flam) on our additional earnings, leaving us with less purchasing power even after we traded every available hour for the additional income. Stuck with trading our time for devaluing currency, we will be poorer in what really counts-- our time and energy--and poorer in the purchasing power of our income. This increases the temptation to gamble whatever money one has to outrace the authorities' devaluation, and indeed, 2020's rampant speculative bubbles generated a widespread illusion that the agile gambler could easily outrace the devaluation. For example, take $2,000, gamble it all on the highest-volatility stocks, and turn it into $200,000. Oops, and then run the fortune to zero. That's the problem with relying on a hot hand in the casino to avoid trading time for money: the vast majority of punters lose in the casino, especially when the tide that's been raising all boats ebbs away. (Governments love gamblers who win, of course; if you live in a high-income tax state, add 9% to the federal tax rate of 32%, and be prepared to "share" 40+% of your casino winnings.) The other approach is to reduce our need for money to a very low level so we're not forced to trade what we cannot create more of--time--for something that's rapidly losing value. A second related approach is to trade our time for time-honored forms of money that have intrinsic value. While I have been on record since 2016 as saying positive things about cryptocurrencies, including my own proposal for a labor-backed cryptocurrency (A Radically Beneficial World), the historic stalwarts in the intrinsic value camp are gold and silver. But anything with intrinsic value will do: grain, tools, nails, shelter, etc. Having the skills to generate goods and services of intrinsic value is very much like "printing money with our time" because our skills make our time valuable, not in terms of what government currency is worth but in terms of the value others find in the goods and services we generate with our skills and time. History informs us that governments inevitably respond to crisis by devaluing their currency and by raising taxes. In the current era, the more money commoners earn, the more taxes they pay, as taxes are progressive. The less we earn, the less taxes we pay. Politically, this cannot change much, for as people become poorer, their ability to pay taxes diminishes. So taxes will rise on high earners, not on those earning relatively little. It may well be that every dollar of nominal gain in income will simply pay higher taxes. Is that really what you want to spend your time doing, paying higher taxes? They Can Always Print More Money But We Can't Print More Time. So what do we spend our precious time doing? Running the Red Queen's Race with devaluing currencies, or lessening our exposure to the theft of our time by currency devaluation and taxes? It's not an asymmetry we will have to address tomorrow, but the time will come when it presses on us like gravity itself. 
This essay was first published as a weekly Musings Report sent exclusively to subscribers and patrons at the $5/month ($54/year) and higher level. Thank you, patrons and subscribers, for supporting my work and this free blog. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com. My new book is available! A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet 20% and 15% discounts (Kindle $7, print $17, audiobook now available $17.46) Read excerpts of the book for free (PDF). The Story Behind the Book and the Introduction. Recent Podcasts: AxisOfEasy Salon 38: Should social media platforms be open source public utilities? (56 minutes) Local and Decentralised Economies: The Start Of A New Environmentalism (54 min) My COVID-19 Pandemic Posts My recent books: A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF). Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World (Kindle $5, print $10, audiobook) Read the first section for free (PDF). Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF). The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF) Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF). Become a $1/month patron of my work via patreon.com. 
Thousands apply for grueling jobs in Amazon warehouses, low-paid serfdom
with only one purpose: increasing the profits of billionaires. Wouldn't it be beneficial if those
people had an alternative source of paid work that served the interests of their family and community?
Many people dismiss my proposed alternative (CLIME) as too idealistic to work in the real world. Nobody says corporations are too idealistic to work in the real world, yet CLIME is a system of community owned and run corporations. The only difference between the two is the purpose and ownership. CLIME: Community Owned Corporations The world has entered an era of profound uncertainty. The Old Normal is gone for good, and the deck is shifting ominously beneath our feet. Now is the moment to ask: what would a fairer, more sustainable system look like? How would it be better for me, humanity and the planet? Even before the global upheavals, our system was failing. Now that it's unraveling, it's time for a new arrangement that's actually sustainable on our resource-depleted planet that doesn't favor wealthy insiders. But those gorging on inequality will never accept reforms that strip away their unearned privileges, and so the only practical way forward is a Hacker's Teleology. What's a Hacker's Teleology? A hack is a workaround in a kludgy, broken system-- a new way of connecting the dots. Teleology means the destination we end up reaching because that's where the dots lead. In this book I connect the dots of my own life experiences to show how a sustainably fair way of organizing human activity would work. In telling my story, I'm also telling our story, because we all share our limited-resources world and the same aspirations for fairness, belonging, getting ahead and a say in our future. So let's get started on an arrangement that actually works for all of us--and our world. Read excerpts of the book for free (PDF). The Story Behind the Book and the Introduction. A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet 20% and 15% discounts end September 30 (Kindle $7, print $17)
Recent entries: They Can Always Print More Money But We Can't Print More Time February 27, 2021 Trapped! February 26, 2021 Oil and Debt: Why Our Financial System Is Unsustainable February 25, 2021 Anatomy of a Bubble and Crash February 23, 2021 The Babble-On 7: The Fed and Yellen February 22, 2021 Next Up: Global Depression February 19, 2021 What Poisoned America? February 18, 2021 GBOAT: Is This the Greatest Bubble of All Time? February 16, 2021 Presidents Day: Carter's Prescient Farewell Address in 1981 February 15, 2021 Gains Are Unreal, Losses Are Real February 11, 2021 What Collapsed the Middle Class? February 10, 2021 Debt and the Demise of the Middle Class February 9, 2021 The Top 10% Is Doing Just Fine, The Middle Class Is Dying on the Vine February 4, 2021 Our Fragile, Brittle Stock Market February 2, 2021
Silver Swans, Maginot Lines and the Unforeseen Risks of Collapse
February 1, 2021
Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency. All contributors are listed below in acknowledgement of my gratitude.
Of Two Minds Site Links home musings my books archives books/films policies/disclosures social media/search Aphorisms How to Contribute, Subscribe/Unsubscribe sites/blogs of interest original music/songs Get a Job (book) contributors my definition of success why readers donate/subscribe to Of Two Minds mobile site (Blogspot) mobile site (m.oftwominds.com)
HUGE GIANT BIG FAT DISCLAIMER: Nothing on this site should be construed as investment advice or guidance. It is not intended as investment advice or guidance, nor is it offered as such.... (read more) WHY EMAIL TO THIS SITE IS READ BUT MAY NOT BE ACKNOWLEDGED: Regrettably, I am so sorely pressed for time and energy that I am unable to respond to the vast majority of emails. Please know I read all emails, but I can only devote a very limited number of hours to this blog and all correspondence....
Contributions
Contributors and subscribers enable Of Two Minds to post free content. Without your
financial support, the free content would disappear for the simple reason
that I cannot keep body and soul together on my meager book sales alone.
Become
a patron of my work via patreon.com
How to Contribute, Subscribe/Unsubscribe to Of Two Minds
SPECIAL APPEAL TO READERS OF OFTWOMINDS from longtime correspondent Cheryl A.:
The addition of the weekly musings has been an extra bonus for supporters that has
provided further insight into the markets, as well as the world around us (often
providing a much needed smile).
I have no doubt that those who generously contribute to this site recognize the value
that it offers. I hope that those of you who visit, but have not yet contributed,
will consider doing so. Your support is essential in helping to maintain such an
important resource.
Thank you, Cheryl, for this vote of confidence. I can only promise that
I will continue to do my best.
"This guy is THE leading visionary on reality.
He routinely discusses things which no one else has talked about, yet,
turn out to be quite relevant months later."
"You shine a bright and piercing light out into an ever-darkening world."
Contributions in any amount are greatly appreciated.
Subscriptions to the Weekly Musings Reports
Subscribers ($5/mo) and those who have contributed $50 or more annually
(or made multiple contributions totalling $50 or more) receive
weekly exclusive Musings Reports via email ($50/year is about 96 cents a week).
Each weekly Musings Report offers five features:
At readers' request, there is also a $10/month subscription option.
(Everyone at the $10/month rate has the opportunity to add another person
to the Musings email list for free.)
What subscribers are saying about the Musings
(Musings samples here):
The "unsubscribe" link is for when you find the usual drivel here
insufferable.
How to Contribute, Subscribe/Unsubscribe to Of Two Minds
Become
a $5/month patron of my work via patreon.com
Extra-Special Bonus Aphorisms:
"There is no security on this earth; there is only opportunity." (Douglas MacArthur) "We are what we repeatedly do." (Aristotle) "Do the thing and you shall have the power." (Ralph Waldo Emerson) "Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius and a lot of courage to move in the opposite direction." (E.F. Schumacher, via Tom R.) "He who will not risk cannot win." (John Paul Jones) "When we drink coffee, ideas march in like the army." (Honore de Balzac) "Progress is not possible without deviation." (Frank Zappa, via Richard Metzger) "Victory favors those who take pains." (amat victoria curam) "The man who has a garden and a library has everything." (Cicero, via Lee Bentley) "A healthy homecooked family meal and a home garden are revolutionary acts." (CHS) "Do you know what amazes me more than anything else? The impotence of force to organize anything." (Napoleon Bonaparte) "The way of the Tao is reversal" Or "Reversal is the movement of Tao." (Lao Tzu) "Chance favours the prepared mind." (Louis Pasteur) "Success consists of going from failure to failure without loss of enthusiasm." (Winston Churchill) "Where there is ruin, there is hope for treasures." (Rumi) "The realm of gratitude is boundless." (CHS, 11/25/15) "History doesn't have a reverse gear." (CHS, 12/22/15) Smith's Law of Conservation of Risk: Every sustained action has more than one consequence. Some consequences will appear positive for a time before revealing their destructive nature. Some consequences will be intended, some will not. Some will be foreseeable, some will not. Some will be controllable, some will not. Those that are unforeseen and uncontrollable will trigger waves of other unforeseen and uncontrollable consequences. (July 8, 2014)(thanks to Lew G. for retitling the idea.) Smith's Neofeudalism Principle #1: If the citizenry cannot replace a kleptocratic authoritarian government and/or limit the power of the financial Aristocracy at the ballot box, the nation is a democracy in name only. The Smith Corollary to Metcalfe's Law (The Network Effect): the value of the network is created not just by the number of connected devices/users but by the value of the information and knowledge shared by users in sub-networks and in the entire network. (CHS, 4/6/16) My Credo of Liberation: I no longer care if the power centers of our society--the distant, fortified castles of our financial feudal system--are changed by my actions, for I am liberated by the act of resistance. I am no longer complicit in perpetuating fraudulent feudalism and the pathology of concentrated power. I no longer covet signifiers of membership in the Upper Caste that serves the plutocracy. I am liberated from self-destructive consumerist-State financialization and the delusion that debt servitude and obedience to sociopathological Elites serve my self-interests. (Thank you, Klaus-Peter L., for reminding me) "We've become a culture of excuses rather than solutions: solutions always require sustained effort and discipline." (CHS 4/9/16) "Fraud as a way of life caters an extravagant banquet of consequences." (CHS 4/14/16) "Creativity = problem solving = value creation." (CHS 6/4/16) "Truth is powerful because it is the core dynamic of solving problems." (CHS 7/21/17) "We live in a system of human emotions that masquerades as a science (economics)." (CHS 1/1/18) "Always remember, your focus determines your reality." (George Lucas) "Diversity is for poor people. Sameness is for the successful." (GFB) "When power dissipates suddenly, it dissipates completely." (CHS 7/14/19) "Disobedience is the true foundation of liberty. The obedient must be slaves." (Henry David Thoreau) "Markets cannot price in the value of non-monetized natural assets such as diverse ecosystems." (CHS 7/14/19) |
|
||||||||||||
|
All content, HTML coding, format design, design elements, original images, videos and musical compositions
and recordings on www.oftwominds.com are protected by copyright
© 2021 Charles Hugh Smith, All global rights
reserved in all media, unless otherwise credited or noted.
Terms of Service:
All content on this blog is provided by Trewe LLC for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information. These terms and conditions of use are subject to change at anytime and without notice.
Our Privacy Policy:
PRIVACY NOTICE FOR EEA INDIVIDUALS
Notice of Compliance with The California Consumer Protection Act
Regarding Cookies:
Our Commission Policy:
|
|
|
|||||
| home email me (no promise of response, sorry, here's why) mirror site | |||||
