FinTekNeeks

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How Saving Creates Wealth For Everyone

Posted in Money

Imagine the folly of allowing people to play elaborate games which do nothing whatever to increase consumption. It’s madness.
~ Brave New World

About a week ago, an individual posted a dangerous, yet subtle topic on Dash’s reddit about saving. I expect this attitude toward saving money from academics and I suspect they will try to continue to poison as many other people as they possibly can. Fundamentally, these people – especially the academics – are useful idiots of indebted governments; as governments pile on more debt, they must get their money from someone and savers become their targets. The reason why savers become demonized as “hoarders” is really a propaganda technique of eventual confiscation. In this post, we look at the ethics of saving money and why saving money not only increases your wealth, but also helps increase the wealth of those around you.

The Extreme: Saving Everything

If you owned every bitcoin in existence, it would crash to 0 and no one would want to own it for multiple reasons, but let’s look at a simple reason. Owning every bitcoin means that others can’t own any, which means people will create something else. This is why bitcoin started in the first place; the elite began playing a game of “confiscating savers’ money” (bailouts and bailins) and as they did this, more people moved to bitcoin.

Stated differently, people started playing by a new set of rules that left out the elite. It’s ironic how many billionaires are trying to get thousands of bitcoins now and paying a high price to do so, when these were the same people who tried to leave others behind.

Owning all of something sounds like something you can do that will make others envy what you have, but it actually accomplishes the opposite and history is full of these examples. There are two major examples bring up that are fallacies here: the Hunt brothers’ cornering of silver in the 1980s and John D. Rockefeller’s standard oil. In the case of the Hunt brothers, they were trying to corner less than 1% of the supply. In Rockefeller’s case, even if he owned every US company in oil, he would still have only owned a fraction of the world’s oil. However, Rockefeller failed in multiple places within the United States, such as Texas and the Dakotas. The real goal behind the “monopoly busting” of the government against Rockefeller was to give the government more power, and it worked.

So in the extreme case of saving – owning all of something like bitcoin – this would actually destroy the success of the item being saved since no one else could participate.

Saving For Abundance

Unlike owning all of something – which invalidates itself – saving for future abundance is more common. In this case, a person sets aside a portion of what they own to save. In the bitcoin community, this is similar to holding, but it can also be saving by peer-to-peer lending or saving in an account where an institution does the lending (on exchanges, this is common too). For an example, one could lend bitcoins to miners in China and they term this being a “shareholder” in their company and one could earn interest on these bitcoins. The “savings” in this case is funding an idea and receiving a return for it.

But let’s suppose that you just set aside bitcoins and that’s it. Are you a hoarder? What service are you providing? Are useful idiots for governments correct that savers are evil?

Let’s suppose that twenty-one million people owned all the bitcoins in a society of one hundred million people. Useful idiots of governments would scream “equality” and declare confiscation should happen to level the playing field of everyone and governments would be thrilled because they could sit and do nothing except confiscate money from people (free income for them), but it’s important to realize that governments here become useless predators and are producing nothing of value.

In a world where liberty and markets make the rules, people not spending bitcoins is a market signal: what this fundamentally means is that these twenty-one million people don’t see any product worth their bitcoins. This is a major problem because it means entrepreneurs don’t understand the current market; if no one is spending that is a signal that current businesses are no longer solving problems that people need.

When I hear Keynesian economists claim that “People need to just spend and stop saving” what they’re not telling people is that if everyone stops spending, this signals to all entrepreneurs that the current market no longer applies to consumers. For an example, would a cancer patient who owns a bitcoin in our hypothetical society not spend his bitcoin if an entrepreneur created a cure for cancer for a cost of one bitcoin? Yet, what’s the incentive to create the cure for cancer, if you can just become the useful idiot of the government and get free money by taking from those who have without producing anything?

In the same manner, if bitcoin continued to rise in price, many people would swap their bitcoins for things they want or need. For an example, in my case, if one bitcoin rose the price of a really great 3D printer, I would totally buy one with a bitcoin. For other people it may be a really cool car or a house they want and we’ve seen many people in bitcoin’s history use their early bitcoins to buy both of these. Relative to one’s needs – which is controlled by their decision, not politicians – a person will make the swap from bitcoin to something they want when they want to. Notice the liberty of this statement: the person makes the call of what is valuable or what is not valuable.

Don’t let academic economists misguide you: if someone is not spending money, this is a valuable signal. It means that there is a group of people who don’t have their needs being met and this should alert entrepreneurs that new ideas and products need to be created. Economists who claim that “we live in the age of abundance” can easily be refuted by looking at shortages, such as the IV fluid shortage in the United States (salt water is in a shortage in the United States!), the sugar shortage all across the world, the shortage of cures for many diseases and illnesses, like cancer, among many other shortages. If people aren’t spending, the reason is that they need solutions that aren’t being addressed and when these solutions exist, they will be addressed.

Governments Need Their Useful Idiots

The people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country.

Most people of any society will believe whatever lies they’re told. This is a reality. As Herman Göring pointed out, you can lead anyone to war – it’s easy. Governments are in so much debt right now that they need people to hate saving money. In the case of Americans, this is especially peculiar since Americans have 15% of their money confiscated every year by the government in the form of “social security” which is really forced savings that allow the government to borrow cheap money (Americans hardly ever make a return from this and have no control over these funds, such as where they’re invested).

Saving, investing and controlling your future is the path of liberty, while what we see from governments is a form of forced savings (often free money for them), limited savings (retirement accounts with strict guidelines), or a demonization of savers in general by using the term “hoarders.” This is the doublespeak George Orwell warned of: saving is only approved when the government controls it (social security), otherwise it’s hoarding. The real purpose of this is to let the government have your savings while giving you back less of it – negative interest rates are the most overt example of this.

Final Thought

We pretend to work, and they pretend to pay us. ~ A popular joke in the Soviet Union

If we can get a government to confiscate money from people without having to work, we won’t work in a manner that produces results. The long run result of this is absolute poverty for everyone because work no longer needs to produce solutions; it’s like the Keynesian example of digging holes and filling them back in with dirt. Work becomes meaningless.

By contrast, in a free society where people have power to spend or not spend, entrepreneurs must always produce solutions for the market, or else they’ll go extinct (and they should, according to evolution). When people aren’t spending anything, they’re signalling to the market, “YOU AREN’T SOLVING MY PROBLEMS” and everyone on the planet has needs or wants that aren’t being addressed. This will always be the case. However, when you don’t see solutions to your problems – such as cures for cancer – understand that fundamentally, there is no incentive to create a cure for cancer when you can just confiscate money from producer with the help of governments.

If you’re not spending your bitcoins right now, good! That means you haven’t found something that you’re willing to trade your bitcoins for, or the bitcoin value isn’t high enough relative to what you want. You are putting pressure on entrepreneurs and they need some pressure. Life coaching creates nothing, like adult coloring creates nothing. Let’s see real businesses that solve real problems instead of fabricated ones. Or, you can continue giving governments power and watch your poverty increase. I mean, one of the most developed societies in the world – the United States – has a shortage of saline IV fluid. Salt water!

As an entrepreneur myself, I’ve looked into solving this saline IV fluid shortage, but learned that one main reason it’s in a shortage is because you can’t earn enough money to offset all the costs producing it. It’s cheap to produce, but one problem with an IV bag could costs you billions in lawsuits (given the law of large numbers, this is bound to happen in the same way that genetic diversity might mean some people are allergic to penicillin). The bottom line is that the cost of saline IV fluid would have to rise to offset all those “extra” costs and this would attract “very angry politicians” that would limit the company’s profitability. I respond to incentives; even though this shortage is very costly, the cost to solve it isn’t worth it. Welcome to reality.

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