when the pressure is lost due to influx of money, information becomes distorted. everyone ends up buying for 5 dollars and selling for 4, losing money with each transaction. the complexity of the system just hides this
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the basic function of money is simple. don’t do stupid things for simple initiatives money isn’t even necessary, but for more complex projects money acts like a hydraulic fluid, transmitting information pressure across the subsystems
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every failed startup that took in hundreds of millions of dollars of funding basically ended in such a state. they took in X amount of money but couldn’t figure out a way to actually turn that into greater than X
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college education debt is an example. majors that are basically “holiday for rich kids” are mixed with ones that actually can repay the loan wo drowning in interest
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the money is “soft” because no one is actually holding the risk just like banks can afford to invest in bullshit bc of federal insurance or bail out expectations
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these activities always have a moral component. we NEED to go to war. we NEED to pay for everyone’s cancer bill. we NEED to build disabled ramps. we NEED to save the earth. we NEED college educations. we NEED to learn critical race theory
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this is the benefit of soft money. it allows the market to react to priceless values the downside of course is that moral initiatives come with boatloads of moral conflict with angry people on both sides
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hard money, like the world btc maximalists dream of is a state where nothing “stupid” can be done with money. only “good” investments that are worth unfreezing btc are undertaken
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one weakness here is that such a system cannot integrate the priceless but the critical weakness is that a moral argument boiling down to “don’t be stupid” doesn’t reflect on if hooman life itself is stupid or not. sth that an external observer, such a cat, easily sees.
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this is y hard money holders tend to feel cultish, whether it’s burying gold in a pit for forever or holding btc forever. they necessarily hold on to the religious argument that hooman life is priceless. to break this foundation breaks the whole ideology
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soft money advocates have an intuitive sense that markets as they are now produce externalities in a way that DOES put a price on hooman life.
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should grandma’s life be extended for an extra year at the cost of 1 trillion, selling out entire neighborhoods to foreign investors? it’s a question many don’t want to answer. but the market, in its thick skinned pragmatism WILL provide and answer
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as with all things, neither of these is correct because “rightness” depends on the situation a dog frisbee for example should neither be made of jello or steel it needs to be made of fabric or rubber and also depends on how big of a chewer the dog is
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End of conversation
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