Image by Gordon Johnson from Pixabay
I would like to talk about a structural issue of world economies, which is the enormous distortion of relative prices caused by the so-called MMT, Modern Monetary Theory from its implementation in the 70s when the dollar was established as the world reference currency. Precisely, what happened is a relative distortion in favor of large corporations and to the detriment of the population in general.
Relative prices refer to the costs of goods or services in relation to others. That is, it is the relationship between the prices of two different goods.
The relative price is an opportunity cost. Microeconomics is the study of how economic agents react to changes in relative prices and how these relative prices are affected by the behavior of producers. In any market economy, relative prices act as signals about the surplus or shortage that may exist in each particular field. If we say that a bag of candy costs $1, can we say that this is a good price or not? Is the price too high or too low? Without other information at hand, you can't really answer those questions. You would need to know the cost of other goods, the salary you earn, and even the price of other candies of different brands. In other words, we should know how much a bag of sweets costs measured in kilograms of potatoes, or in liters of gasoline, or in average wages for the population. That is a relative price.
I firmly believe that, within a decade, the currency that will be used the most will be the sat (one hundred millionth part of a Bitcoin), whether this is legal or not, whether it is prohibited or not, whether we are obliged to spend and receive the evil CBDCs or not.
So the question is not what can you buy with u$200 or $97,200, but what can you buy with 972,000 sats. That is a big difference, since, always according to my criteria, decentralization will bring about the greatest recomposition of relative prices that human civilization has experienced.
Let me give you a very simple example. When I was young and planning a fishing trip with my friends to the coast, the price of gasoline was not a relevant item. We did not calculate gasoline in the trip budget because it was very cheap. Today, for any trip, gasoline is one of the main items in any travel budget. What happened? Is the process of obtaining gasoline more expensive? No, actually, it's cheaper. So? Yeah! You guessed it! The explanation is that the oil corporations, probably the most powerful corporations on Earth, increased their profitability. This can be easily demonstrated by the so-called "Cantillon Effect" that I spoke of more than once in previous posts, which consists of the fact that, from the printing of currency by a centralized government office, it is the corporations that benefit the most, while that the population, in general, suffers the inflation caused by this spurious issue.
This example can be applied to everything you can imagine, from food to medical treatments, including entertainment, clothing, and kiosk cookies. The distortion of relative prices means that, among other things, millennials today cannot access housing as we could access it relatively easily 40 years ago. Don't look for big economic treatises full of bullshit about economic forecasts, because those who do it are paid desk stickmen who work for the universities paid for by those corporations. The numerous daily economic reports are pure rubbish. They are useless. The corporations are deciding the future of humanity with the MMT and with the distortion of relative prices that they continue to manage in their favor with their daily actions.
Corporations use inflation as an excuse to increase prices and achieve better returns for shareholders. And the problem becomes more visible every day because the relative prices are completely distorted in a labyrinthine structure that will take a long time to unravel. The problem is magnified if one considers that, for 40 years, the concentration through mergers and acquisitions of large companies has made the concept of "competition" practically disappear from the markets, therefore, the large conglomerates do what they want with the prices.
My vision (and my most fervent wish!) is that the new generations, the kids that are being born today, incorporate the concept of decentralization into their DNA to begin to unravel the labyrinth of relative prices. When this happens, the prices of goods will tend to have more to do with labor productivity than with the decision of a bureaucrat at a desk to multiply the prices of a product by a factor that has to do with an "official index" of price increases, made by an asshole who received orders from somewhere higher up in the machine.
The result of this rearrangement will be that 972,000 sats will buy many more goods than $97,200 today.
I sincerely hope that within a few years the biggest plagues that plague the planet, the Death Star, Darth Vader, the Emperor, Jabba the Hutt, and Bib Fortuna (IMF, World Bank, BIS, big banks, central banks) disappear and there is no more discussion about decentralization because it will already be part of the daily life of humanity.
In any case, and although it is very difficult to forecast the future, what we do know is that the world is going to be very, very different from the one we are living in today, and, if we manage to save ourselves from nuclear wars, plandemics, and printing machines bills to stimulate the economy, decentralization, once imposed as a philosophical concept, will result in a more equitable world.
Of all this, what seems to me to be important is that common people for the first time are installing this discourse in their daily life, a secret that was cleverly kept secret by the financial elites of the planet. Today many people know what the fraud of the central banks consists of, the indebtedness to which countries with weak economies are subjected by the IMF and the World Bank, and what inflation means as a method of enriching the rich even more and impoverishing even more to the poor. Until a few years ago, nobody knew about this, and they thought that the problem was the bad governments that the country had, an argument widely disseminated by a bunch of servants of power called mainstream journalists (responding to advertising guidelines). Now many know that inflation, poverty, and indebtedness are a tool of the elites to control and govern the planet.
If this sounds like a conspiracy to you, then unsubscribe from this anarchist ragtag and read the newspaper or some TV show that carries economic scholars.
I will continue.
Thank you for reading! Decentralize yourselves as much as you can, and much more! Work for yourselves, not for others. When you work for someone else, they pay you what YOUR POSITION is worth, when you work for yourself, they pay you what YOU are worth. No one achieves financial independence by working as an employee. Live long and prosper!
Never forget:
As usual, none of the things written in this post are financial advice and are not intended to replace personal research. My sole intention in writing this post is informative. Several of the things discussed here could be wrong, so in no way can this post be construed as financial advice, and in no way should it replace your own research.
If you have any questions or comments, please feel free to leave them down below
You can also contact me at gerardo.saporosi@gmail.com
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