Credit is not savings.
It is a claim created against the future.
In modern systems, credit is issued first and funded later. Banks do not lend deposits. They create new money when they issue loans. The borrower receives purchasing power that did not previously exist. The liability is pushed forward in time.
This process expands the money supply without increasing real goods or productivity.
At small scale, credit coordinates investment.
At large scale, it distorts prices.
When credit is cheap and abundant:
• Asset prices rise before wages
• Risk is mispriced
• Debt grows faster than income
• Consumption is pulled forward
• Future output is assumed, not earned
This is not growth. It is temporal displacement.
The system requires continual expansion to remain solvent. Old debt is serviced by new credit. If expansion slows, defaults appear. If expansion stops, the system contracts.
There is no equilibrium. Only acceleration or collapse.
Because credit is created without hard limits, it concentrates power in institutions that can issue it. Those closest to issuance benefit first. Those furthest away pay later through inflation and higher taxes.
This is why inflation is described as a “mystery.”
Its cause is structural.
Sound money constrains credit.
Fiat money amplifies it.
Bitcoin does not prohibit lending.
It prohibits credit creation from nothing.
Loans must come from saved capital. Risk must be priced. Time preference must be real.
This is the difference between money that measures value
and money that manufactures claims.
One preserves reality.
The other replaces it with promises.
#Bitcoin #Credit #Finance #CentralBanking
Taxation Was Never Meant to Be Permanent
Income tax was introduced as a temporary emergency measure.
In the UK, income tax first appeared in 1799 to fund the Napoleonic Wars. It was repealed, reinstated, and only made permanent in 1842.
In the US, income tax emerged during the Civil War, was repealed, then reintroduced in 1913, sold as a tax on the wealthy, not the population at large.
Before permanent income taxation, societies still functioned.
Cities had roads, bridges, ports, universities, water systems, and trade infrastructure, all built without perpetual taxation of labour and savings.
So what changed?
Modern taxation didn’t expand because governments suddenly became more efficient. It expanded because governments stopped running surplus budgets.
Under Keynesian economics, deficits are not a failure, they are a policy tool. When growth slows, governments borrow. When debt compounds, they inflate. When inflation bites, they tax more. Not to improve services, but to keep the system solvent.
This is why politicians fail time and time again.
They overpromise and underdeliver, not because they are uniquely incompetent, but because the system is structurally designed to fail.
You can see the consequences everywhere:
Cost of living crises
Pension crises
Housing affordability breakdowns
Declining public services despite rising tax burdens
From an Austrian economics perspective, this outcome is inevitable. When money can be created without constraint, fiscal discipline disappears. Taxation becomes a mechanism to offset monetary mismanagement, not a means of funding productive public goods.
This is not a left vs right issue.
It doesn’t matter who is in power. Until the underlying system changes, until Keynesian assumptions are challenged, politicians will continue to fail, budgets will remain permanently in deficit, and citizens will continue to carry the cost.
Broken money produces broken incentives.
Broken incentives produce broken governance.
History is clear on this.
And it’s repeating, again.
A recurring pattern I see in Bitcoin discussions is the conflation of the protocol with the market built around it.
Bitcoin is a monetary protocol.
TradFi exchanges, market makers, ETFs, custodians, oracles, and fiat on-ramps are optional market infrastructure layered on top of it.
When people critique Bitcoin by pointing to exchange failures, liquidity providers, pricing oracles, or custodial risk, they are not critiquing Bitcoin.
They are critiquing fiat-era intermediaries interacting with Bitcoin.
That distinction matters.
Within the protocol:
• No miner can censor a valid transaction
• No market maker can change the rules
• No exchange can prevent settlement between self-custodied users
• No institution controls issuance or supply
• No authority can override consensus
Bitcoin does not eliminate intermediaries by force.
It makes them optional by design.
The confusion arises when people treat:
• price discovery as governance
• custody as control
• liquidity as authority
• markets as protocol
That framing imports TradFi assumptions into a system that was explicitly designed to remove them.
My aim has always been to evaluate Bitcoin on its own terms — at the protocol layer — not through the lens of fiat market behaviour built around it. When you separate those layers, most of the common criticisms collapse.
Bitcoin is not perfect.
But it is precise.
And precision is what most debates are missing.
#Bitcoin #FiatMoney #TradFi
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