Michael Wilkins

The stock-to-flow ratio explains why some forms of money endure and others fail. Stock is the existing supply of an asset. Flow is the amount added each year. When flow is small relative to stock, supply is stable. When flow is large, value is diluted. This ratio matters for money. Gold functioned as money for centuries because its stock-to-flow was high. New supply could not be produced quickly, even when demand increased. That constraint protected purchasing power over time. Fiat currency has a stock-to-flow problem by design. Flow responds to policy, not scarcity. When demand for money rises or debt becomes unmanageable, supply expands. Purchasing power declines as a result. Bitcoin was designed with this distinction in mind. Its total stock is capped. Its flow is known in advance. Issuance decreases on a fixed schedule. Every four years, Bitcoin’s flow is cut in half. Its stock-to-flow rises automatically, without discretion or intervention. This is not a pricing model. It is a description of supply mechanics. Hard money does not depend on restraint. It depends on constraint. Bitcoin’s stock-to-flow is enforced by rules, not promises. That makes it the first digitally native form of hard money with predictable scarcity. Over time, assets with stable supply are used to preserve value. Assets with elastic supply are used to spend. That pattern has repeated throughout history. Bitcoin fits the former category by design. #Bitcoin #HardMoney #Money #Economics #Inflation #Finance

The Bank of England cutting rates to 3.75% is not a sign of strength. It is a response to economic contraction, not confidence. Rate cuts happen for two reasons: either productivity is accelerating, or demand is weakening. This is the latter. Falling inflation here is not driven by abundance or efficiency. It is driven by slowing consumption, tightening household budgets, and a fragile economy that cannot tolerate higher borrowing costs. The so-called “mortgage war” confirms this. Banks are not cutting rates out of generosity — they are competing for scarce creditworthy borrowers. When lending demand weakens, price competition follows. Yes, lower rates may reduce monthly payments in nominal terms. But history shows what usually comes next: house prices reprice upward, absorbing the benefit. Cheaper money does not make housing more affordable. It makes housing more expensive in larger units of debased currency. An average £270 monthly saving sounds meaningful — until prices rise 5–10% and first-time buyers are pushed further out. Lower rates help existing asset holders first. That is the Cantillon effect, not prosperity. This is the deeper pattern: • Rates rise → households strain • Rates fall → assets inflate • Purchasing power continues to erode in both cases Monetary easing is not a solution. It is a delay mechanism. Real recovery does not come from cheaper credit. It comes from sound money, productivity, and capital formation without distortion. When central banks cut rates during contraction, they are not fixing the system. They are signalling that it can no longer function without intervention. That is not stability. It is dependency. https://www.perplexity.ai/page/bank-of-england-cuts-rates-as-jhJuKhX8Su2x0X.F8ELx5g #UK #UKEconomy #BankOfEngland #Economy

Money is not a social construct decided by vote. It is a tool that emerges through use. Across history, societies have repeatedly discovered that certain properties are required for money to function over time: scarcity, durability, divisibility, verifiability, and resistance to manipulation. The forms of money that lacked these properties were eventually abandoned. The ones that possessed them endured. Gold became money not because it was declared so, but because it was difficult to produce, easy to verify, and could not be created at will. These constraints mattered. They limited the ability of rulers to dilute value and forced economic growth to come from productivity rather than monetary expansion. Fiat currency began as a claim on hard money. Over time, that constraint was removed. In 1971, money became fully elastic, issued by policy rather than bound by scarcity. From that point on, money ceased to function as a reliable store of value and became a tool for managing debt, growth targets, and short-term stability. The consequences are structural, not accidental: purchasing power erosion, asset inflation, rising debt, and increasing reliance on financialisation rather than production. Bitcoin was not designed to optimise payments, speculation, or short-term returns. It was designed to reintroduce monetary discipline in a digital world. Its supply is fixed. Its issuance is predictable. Its rules are enforced by a network, not by discretion or authority. This makes Bitcoin different from currencies, equities, or commodities. It is a monetary system governed by rules rather than trust. Bitcoin does not promise economic equality or volatility-free markets. It simply restores a property money once had: the inability to be debased. Throughout history, harder forms of money have eventually replaced softer ones, not through force or persuasion, but through reliability over time. Bitcoin represents the first digitally native attempt at hard money. It is not a rebellion against the system. It is a response to the limits of the current one. Understanding Bitcoin begins with understanding money. #Bitcoin #Money #HistoryOfMoney #Economics #Finance

#Bitcoin is widely misunderstood because it is evaluated using the wrong framework. Most financial advisors and wealth managers analyse Bitcoin as if it were an equity, a commodity, or a speculative risk asset. It is none of those. Bitcoin is a monetary system. Equities are claims on future cash flows. Commodities are inputs to production. Currencies are liabilities issued by states and managed through policy. Bitcoin is different. It has no issuer, no balance sheet, no management team, and no cash flow because money is not supposed to produce yield. Its function is to store value, measure value, and transfer value without reliance on trust or discretion. This is where the confusion starts. When advisors ask: – “Where is the income?” – “What’s the intrinsic value?” – “How does it compound?” They are asking questions appropriate for businesses, not for money. Bitcoin’s value comes from its rules: – Fixed supply – Predictable issuance – Verifiable scarcity – Censorship resistance These properties remove dilution risk and counterparty risk. Over time, that matters more than narratives, models, or opinions. Bitcoin does not replace productive assets. It replaces the measuring stick used to evaluate them. Until Bitcoin is understood as money rather than an investment product, it will continue to be misunderstood — even by professionals paid to allocate capital. That misunderstanding is not a flaw in Bitcoin. It is evidence that the transition is still early.