"The ENTIRE System is Insolvent" - Jeff Booth on the CONFLICT Between Exponential Tech and Fiat

In this video we will be looking at conflict between the existing Fiat System and the Deflationary Nature of Exponential Technology as stipulated by Jeff Booth in his article 'The Greatest Game'.

To watch the full discussion from the What Bitcoin Did Podcast - https://www.youtube.com/watch?v=G2vAm2hfW9U&t=1504s

To read the Full Article 'The Greatest Game' - https://medium.com/the-bitcoin-times/the-greatest-game-b787ac3242b2

Technological progress has led to exponential efficiency gains, resulting in deflationary pressures that should drive down prices in almost all industries. However, prices have not fallen because the existing monetary system, which requires inflation to remain viable, is incompatible with technological progress.

This conflict must be resolved at a system level. On the one hand, technological progress requires a currency that allows for deflation, while on the other hand, the current fiat monetary system requires inflation and manipulation to remain viable. Without inflation, deflation would take hold and wipe out credit, destroying wealth.

To compound the issue, Governments and Central Banks are currently aligned to prevent widespread wealth destruction by socialising debt in the form of bail outs. Essentially wealth is taken from the productive and working members of society along with the exponentially increasing gains created by technology, whilst large companies are incentivised to reach bail out or 'too big to fail' status.

Policy makers missed the chance for a policy change that could have prevented a complete reset of the existing fiat system 20 years ago. They underestimated the exponential impact of technology on the economy, as evidenced by Nobel Laureate Economist Paul Krugman's 1998 quote: " By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's."

Instead, interest rates were manipulated lower to increase growth, but predictions of growth fell short against the reality of technological progress in the market. Lower rates and additional debt created limited growth, which would have caused deflation and made the debt un-repayable.

Thus, the system required ever-lower rates, leading to debt binges, misallocated capital, and asset bubbles. Global debt rose to over $250 trillion in 2019, with $185 trillion of that new "stimulus" coming in the last 20 years.