Time is the medium in which all of humanity moves through. And like a fish that doesn’t know its in water many of us haven’t the slightest clue of what time is, how to think about time in their own life, or how to think about time at significant social scale.
We as a species constantly update how we record and plan and think about time. Just in the West alone we’ve changed the way we measure time about 4 times in the last 2,000 years. We moved from the Roman Calendar to the Julian Calendar then to the Gregorian Calendar and lastly to the current Universal Standard of Greenwich Mean Time(GMT).
We’ve all heard the popular cliches “Time is money” or “Money is time” thousands of times but its wisdom is deeper than most know and you dismiss the cliche at your own peril. Time is truly undefeated.
Einstein and Relativity
Time has been one of humanity’s deepest conceptual problems. Defining it, measuring it, and using the lessons to one’s own advantage or for the good of others is quite the task even for our most fluid and dynamic minds.
Einstein’s ‘Theory of Relativity” can be renamed to the “Theory of Invariance” without losing much substance at all. Much of the most important content of Einstein’s ‘Relativity Theory’ are the identifications of quantities that do not change from frame to frame. Measuring phenomena in the world, as Einstein shows with brilliant thought experiments, are heavily dependent upon the frame of reference in which you observe and measure the phenomenon. However, Einstein was able to show that light is the only phenomenon that has the same speed in every frame of reference: A constant!
The speed of light(c) is built into the very nature of space and time and we use it to account for our time on earth in an objective way. Currently a nanosecond is defined as light traveling 1 foot in a vacuum.
Of all the SI units of measurement: second of time, meter, kilo, degrees Kelvin, ampere, mole, and candela, the most fundamental unit is time, which is used by all the other proceeding measures because the second is determined by an incorruptible natural constant: the speed of light in a vacuum. The speed of light and therefore “time” is the purest reference point for all measures. It is incorruptible, unchanging, and constant in ALL frames of reference. According to Physicist David Merman its “…downright irrational to insist that one not take advantage of it in designing instruments”.
Time’s Monetary Value
Can you put a price on time? We already have. The price we put on time is usually referred to as the interest rate.
The “time value of money” is a foundational concept in finance. The concept is somewhat elementary yet powerful and extremely profound. It captures truths about our time preferences, truths about the nature of reality, and has an immense impact on our lives.
When you think of money as a network of extended social trust over space and time, you begin to see how extraordinarily powerful money is and how the manipulation and ignorance of money has a significantly negative impact on our lives. This is true in the micro and macro sense of our our own lives and our collective social structures. Money needs to have a solid, trusted foundation, for any type of social trade, social complexity or peace to ever have the chance of occurring over long periods of time.
The time value of money communicates our time preferences in the economy. It assumes we prefer goods/services/money in the present to those same things promised in the future. This concept is pretty intuitive and backed up by research in behavioral economics.
“For us convinced physicists, the distinction between past, present, and future is an illusion, although a persistent one” -Albert Einstein
Interest rates act as inter-temporal exchange rates that link the mysterious partition of past, present, and future time into quantifiable prices. How much future cost are you willing to pay for present benefits? How many present benefits are you willing to give up for future gains? Its a rate that links all to all and everyone to everyone through space and time.
The rate of interest or the price of time can also be said to be the price of money since most rates of interest refer to some type of financial instrument denominated in a particular monetary standard. Money acts as a common reference point of all participants in an economy wishing to engage in trade of some sort just as time is the common reference point for all other measures in the physical sciences. The concepts of time and money are inextricably linked.
The Dark Side of the Moon
Unfortunately, our current money system floats around in the minds of men and the established powers at be, anchoring to no immutable truth, has no limiting principle, and is delinked from the immutability of time and instead linked to government promises about the future.
The US Dollar, being the world’s reserve currency is the reference point for all other economic activity in the world. It acts as the foundation for economic activity yet points to no natural truths or axioms outside itself. Standing behind the dollar is the full faith and credit of the US Federal Government. Luckily for the United States the competition for international investment is minimal due to even higher levels of incompetence abroad, propping up the US dollar as the most reliable money in an endless sea of unreliable government promises.
Even the almighty field of mathematics has to rely on axioms outside itself. Yet, the US Dollar, the foundation of all economic calculation and co-ordination is itself self referential. Its a monetary scheme based on hegemonic and monopolistic power referring to itself as the source of value and truth. For those that worship the state this might not be a bad thing. But for those who want to move to a monetary system that goes beyond “Because I said so” this may be an issue.
We in the United States are able to sustain our lifestyles by being able to borrow perpetually into the future from savers abroad. But this also creates a problem, a problem that isn’t new to ponzi like schemes: what happens if new capital dries up? Well no big deal we just print dollars!
This whole mindset of everything is fine we can just create money infinitely, seems backwards to me ethically and from a systems point of view worryingly short sided and self-referential.
The US Dollar, the King of Fiat is being produced monopolistically, which gives the producer complete power over maximizing its aims through time and space according to its own time preferences disregarding the time preferences of billions of people on planet earth. It produces our globalized world’s unit of account, store of value, and medium of exchange with no competition, no limiting principle, and no truth outside itself…
Calling it the US Dollar is actually highly misleading, making the citizens of the United States think the Dollar is actually controlled by Congress or some group of people accountable to the American public at large. You’d think that since the American people themselves are collateral for our global monetary system they would have some say over it? Wrong.
If you look at US Dollars closely you can see it says Federal Reserve Note. A Note is debt for those that aren’t familiar. These debts or promises to pay are produced and managed by the Federal Reserve, an un-elected body of academics, bankers, lawyers, and bureaucrats. The Fed seems intelligent with its nerdy economists that give it a mirage of scientific authority but for anyone seriously studying the history of finance, economics, the scientific method, basic epistemology, or just common sense this mirage of wisdom is humorous at best.
The Fed is abstract, opaque, and complex enough to be something that protests groups will never protest because they usually like to focus on more shallow subjects like race, gender, and other marginal social issues that are easier to comprehend and easier for CNN and Fox News to get emotional about. The academics at the Fed act like priestly power in a secular, transactional society that can’t think for itself, thanks in part to the successful implementation of mass public schooling.
Fiat money, our new golden calf, has proceeded the death of God famously proclaimed by Nietzche. It makes sense that our grandest, most intimidating buildings used to be Churches but now in almost every major city across the globe, our grandest buildings are financial institutions.
“I can do all things through the federal reserve who strengthens me” -Goldman Sachs 4:13
You’d think by watching CNBC, Bloomberg, or any other news network that the Federal Reserve is an amazing institution full of heroes with “The Courage to Act”. When in fact it exists explicitly to bail out banks(lender of last resort function)when they go out of business, which based on their business model of lending out more than they have(fractional reserve banking), is inevitable. If this sounds like a game of monopoly, it is! Just like in the game of monopoly the bank never goes out of business! Monopoly! Jokes on us!
Before 1933 US Dollars could be redeemed for silver or gold. At the top of our money instead of saying “Federal Reserve Note” it actually said“Silver Certificate” or “Gold Certificate”. Paper money was well understood by earlier generations not to be money but rather a receipt or promise to settle a trade for money in the future. JP Morgan himself, a man that knows a little about monetary empires, said “Gold is money, everything else is credit”. What a dumb fucking gold bug.
In Post 1933 America, American citizens couldn’t redeem their paper ‘money’ for real money: gold. Even though US citizens couldn’t redeem worthless pieces of government IOUs for real money, the world economy still operated on somewhat of a global gold standard but by 1971 President Nixon officially closed the gold window succeeding in protecting the US Federal Government’s hegemonic power and their sponsor bank, the Federal Reserve, from any constraints on money printing.
On the darkest side of the moon, the dollar, now officially decoupled from gold, began an unholy alliance with middle eastern oil. At the heart of the alliance is Saudi Arabia agreeing to only take dollars for their oil exports and reinvesting those dollars in US government securities in exchange for weapons and protection from the US government. A few short years later this deal was successful in getting others to join the scheme facilitating the petro-dollar system that the entire world runs on till this day. This is an issue all to itself but will be left to the reader to do their own research on the consequences of an international monetary system such as this. I for one thinks this relationship between dollars and oil explains a lot of the proceeding world history better than almost any other single factor in an infinitely complex world. Two cliches come to mind: ‘Energy is everything’ and ‘follow the money.’
The international gold standard was the last hope of anyone trying to limit nation states and banks ability to operate in the economy outside of natural laws. Nothing about the gold standard was perfect, the financial network built on top of it was highly corrupt and imperfect but at least there was something free from cheap manipulation or dispute at the base of the human abstractions built on top.
It has to be one of the greatest gradual slight of hands of all time. It took central banks, financial institutions, and the governments they’ve bought almost 56 years to completely decouple their paper from real money that actually limited their ability to create debt which has since been rebranded as money. I’ve got to say well done on their part and its been great for their shareholders.
With no limiting mechanism or force to contend with and with the force of law behind them, financial institutions and their nation state fiefdoms have had no semblance of an opposition that could stop their perpetual debt creation business models. And nothing has…
Post 1971: Floating Truth
Imagine that each government on Earth had a different ruler used for measuring length and they had a monopoly over this function: US inches vs European meters vs some Venezuelan measurement of length etc. And on top of the myriad units used to describe length, the units aren’t determined by anything in the physical world, by natural law, or by market consensus but what a committee of Central Measurers who studied Keynesian Measuring techniques at a prestigious university think they should be. These central measurers were once upon a time impressionable, high IQ, and ambitious academics. They were taught, promoted, and rewarded for thinking the government should intervene in measurement markets to make sure everything is measured to their liking. They get to use the full force of governments and financial institutions to influence what is the best value of length for their respective countries. You can imagine what a cluster-fuck this would be for building anything in the physical world. Yet for our global monetary system this isn’t far off from our current reality ushered in after 1971.
When trying to account for phenomena in the world and tracking socio-economic progress overtime it would help to have units of account(measurements) that aren’t dependent on market perceptions of government promises.
Almost everything in life is in a constant state of flux. Its extremely important to find constants you can rely on, like Einstein did for physics and everyday people do with family, long-time friends, and partners. Instead academics, banking interests, and political interests have put the global economy in a sea of shifting complexity, uncertainties, approximations, and unsavory alliances with no foundation to stand on besides government promises about the future. Sounds promising.
Since 1971 our foundational economic references change from frame to frame making it hard to speak objectively about economic progress over any long period of time and at the same time making it harder for working class people to track their progress to be sure they’re not getting ripped off. The complexity of our financial system makes it easier to steal from those who have trouble dealing with abstract complexity or those who simply don’t have the time or resources to navigate the stupefying complexity of modern finance copulating with modern law. Working class people all over the world don’t have a team of financial advisors, lawyers, and accountants to help them get out of inflating assets. Sound money is of the utmost importance for those who don’t have legacies of familial wealth, nor the information, or the tools to upgrade to assets that don’t decay with time.
Our entire society has to always adjust for inflation which itself is a measurement that changes overtime and all of us have to migrate to risk assets so our labor hours don’t go to waste through inflation. There’s a reason the working class feels like they’re sinking. Well they have been. They’ve been working for “money”(its really central bank debt) that sinks into worthlessness among other causes we don’t have time to discuss..
Imagine being able to change all the measurements you need to communicate success overtime without ever achieving the spirit of that success. Can you imagine how many resources you could tilt your way if people actually take your measurements seriously?
Things aren’t going your way? Just change the measurement! Governments, corporations, and any organization run by people doing a terrible job have been doing this for years. Politicians like Barack Obama are the perfect marketing products of banking interests that sedate, relaxes, and assures the working and middle class that everything is going great! Look the stock market is up plus I have a nice smile! Look unemployment is down! Yes we can! Look at all these measurements! Science! How can you be anti-science?!
Trump will undoubtedly keep doing the same thing as long as any significant percentage of the population thinks inflation rates, stock market indexes, and unemployment statistics are real numbers communicating real information about the state of the world. He has no problem peddling bullshit, and he does it much better than his political opponents which seems to really piss them off. #TheResistance
With no sources of reliable truth through time, truth becomes a subjective narrative shaped by power with absolutely no constraint.
Follow the Light
“Be ruled by time, the wisest counselor of all”-Plutarch
Just as the speed of light and thus time is used as the foundation of measurement in our physical world, we need monetary constants that aren’t dominated by the minds of monopolizing power and can’t change from frame to frame over space and time. As illustrated before through the concept of the time value of money and interest rates, time and money are harmoniously linked because of money’s measurement function, our need for constants in a world full of rapid change, and the proclivity of human beings to distort truth for their own ends.
Entrepreneurs, investors, accountants, consumers, governments, corporations, and really all of us rely on the unit of account and store of value function of money yet we have our ‘money’ based on the promises of a nation state who post their citizens’ wealth as collateral through deliberate monetization of debt or its more honest cousin, taxation.
Gold has stood the test of time as a monetary constant and bitcoin, which seeks to mimic gold in the digital world, has a chance to become a monetary constant over time. Bitcoin hasn’t earned that designation yet but it has the potential to be a monetary constant in the information age and may well prove to be a reliable measure and store of value. As they say, only time will tell.
Gold has immutable, knowable characteristics determined by natural law. Bitcoin uses physical limits in nature, the power of mathematics, and game theory to protect its Proof-of Work chain from human tampering and has a predetermined limit on its supply as well as a predetermined production schedule.
In contrast, the US dollar has virtually no cost to its production, has an unknowable production schedule, an unknowable amount in circulation, and has no connection to natural truths outside of itself leaving the global economy in a web of self-referential non-sense.
Only organic feedback through true monetary constants will reflect our truest collective time preferences throughout the economy making it more likely we will use our time and energy in productive ways instead of having to shift our economies based on the unsustainable debt obligations of nation states and the needs of bank balance sheets. Spend more, its always good for the economy! Borrow more! Spend! Borrow! Low rates! Spend! Borrow! Its your patriotic duty! Saving is bad!
In an international economy dominated by sound money, the demand for this sound money such as gold or bitcoin will constantly shift the time structure of economic production, putting us in balance with physical and economic reality which is always flux. Gold and bitcoin actually have to compete with real inputs in the economy such as labor, energy, raw materials, etc.
This switch to real money and away from a inflationary debt based system would yield a more organic reality dictated by trillions of micro-decisions at the quantum level by individuals in our economy instead of the mechanical, top-down Soviet style decision making, done at the top of our international money pyramid. Real money would also stop incentivizing people to spend their inflating money as quickly as possible and make them more likely to save and spend when needed given their own unique circumstances.
By using constantly decaying fiat money as our units of account and stores of value, gross misallocations, mal-investments, and grossly unnatural income distributions have occurred over space and time due to the centralization, monopolization, and debasement of our money measurements.
Decentralized monetary constants reorients all of us to the true fluctuations in our socio-economic and physical reality not the abstractions and whims of those in power. It also provides reliable incorruptible measuring sticks all strata of society can depend on, over long periods of time.
I hold much of my wealth in bitcoin, and I also hold a fair amount of gold which is the true monetary constant. Gold is inextricably woven into the fabric of reality and has stood the test of time and like the speed of light has the same qualities and measurements no matter the frame of reference. Its purchasing power over time and space is remarkably consistent.
Bitcoin is still a man-made system full of mathematical abstraction so its risks are more pronounced than the physical gold but its potential returns are exponentially greater given its utility in the information age and small market capitalization given its ambitions. Bitcoin’s production is nonetheless tied to energy, information, and time linking its production to the physical limits of the universe something central banks conveniently don’t have to contend with.
If bitcoin and gold are used in combination, the world will be equipped with powerful mechanisms of distributed social trust. Governments, central banks, and international banks will no longer be able to strong arm populations for their own aims wasting and devaluing our time and energy while yielding fabrications of the nature of our economic reality. Equipped with these decentralized economic constants we will be able to scale coordination and cooperation over larger populations in larger spatio-temporal probability spaces yielding innovation and human freedom we’ve never even had the slightest chance of achieving.
Follow the light: time, gold, and bitcoin are truly undefeated.
The most influential and consequential economist of the 20th Century John Maynard Keynes once said, “We’re all dead in the long run” a well known quip in response to other economists who would have reservations about aggressive economic intervention and its long term effects. Keynes is right in a very narrow sense and it elucidates a time perspective of the dominant socio-economic consensus over the last century. Yes we are all dead in the long run, entropic decay is inevitable but this attitude ignores future generations that will have to pay the cost kicked down the road. Death isn’t an evenly distributed event through space and time. There are others human beings to think about besides the very political moment you happen to be in. Its not surprising Keynes had no kids.
Creating other conscious human beings is a transformative experience in any person’s life no matter the gender. The fact Keynes had no kids doesn’t invalidate any of Keynes arguments but it does clearly state the time perspective of Keynes and his followers. Your starting assumptions and time bias can say a lot about how you make decisions. I personally don’t ascribe to this view of time. Keynes and his ilk lack broad historical perspective and dismiss the future consequences so cavalierly, much like an overconfident child that is unfortunately allowed to experiment with society yet has no skin in the game.
The Iroquis, a native american tribe with roots in the North East United States, had a time perspective that could help the tremendous damage done in the West by a severe bias towards an immature understanding of time.
According to the Iroquis, decision makers should think not only about the past and present but seven generations ahead, bringing their decisions into a the holistic present which brings together the lessons of the past, the concretes of the present, and “…the unborn of the future Nation” into a holistic moment where all points in time are respected not just the one you happen to occupy. This holistic present is also very much apart of the perspectives of almost every major religion in the world today which although archaic to many modern people in the west, all of these religions will outlast the bias for presentism in the neo-liberal West. Its just not sustainable economically, environmentally, and at the end of the day the members of world religions out-fuck the faithless.
The discovery of the future is a fundamental differentiator between human beings and the animal kingdom. Civilization is an elaborate walled garden that has to be actively maintained by those who think about the holistic present and have skin in the game. We have enough people hyper focused on the present moment on twitter and make decisions with no adverse costs to themselves. We don’t need this to be the starting place of economic decision making. All of the mathematical elegance is worthless if not anchored to the correct axioms.
The dollar has been maintained by thinkers horribly biased towards the current economic moment in time. Obligations have been piled on future generations at an ever increasing rate with no sign of slowing down.
I personally don’t give the US Federal Government or the Federal Reserve any credit or faith. I am checked out. Their time is way past up.
Influences for Essay:
Conclusion of “A New Information Theory of Money”. George Gilder.
Its About Time: Understanding Einstein’s Relativity. David Merman.