Ghost Money, Part II

So far, we have surveyed the wreckage wrought by a broken pact: the severing of the link between the creation of money and the creation of real-world value.

They flooded the zone with ghost money, and there are consequences and opportunities because of it. Check out Part 1 of this series if you missed:

We diagnosed the illness in that article: the monetary system where the supply of currency, controlled by a small cadre of central planners, expands far faster than our collective ingenuity can innovate. The symptom is inflation, a force we argued is not a benign feature of a healthy economy, but a deliberate act of intentional wealth arson that functions as the greatest, most silent heist in human history.

It is the ghost in the money machine, systematically draining the value from our time, our labor, and our savings.

TLDR: THE ELITE ARE STEALING OUR MONEY

To understand this problem is to be faced with a profound choice.

Do we accept this managed decay as inevitable, or do we seek an alternative?

To simply call for more responsible central bankers or for politicians to show more restraint is a noble but naive hope. It fails to recognize that the flaw is not in the personnel, but in the system itself.

The temptation to print money is too great for these people. They use monetary policy to finance wars, to paper over economic crises, to fund promises without levying unpopular taxes. This is a power too great for any human institution to wield without succumbing to it. The fiat system is not broken, it is functioning exactly as a system of unlimited supply is designed to function. A stealth heist machine. KickTheCan.exe.

The solution, therefore, cannot be a tweak. It must be a paradigm shift. It requires migrating our economic lives from a foundation of shifting sand to one of solid bedrock. That bedrock exists. It is a monetary technology built not on the whims of central bank committee members whispering in dark rooms, but on the immutable laws of mathematics.

The solution is a system executed openly on the world’s largest computer network, visible for the world to audit every ten minutes. The solution is Bitcoin.

The Gravity of Absolute Scarcity

To grasp the power of a Bitcoin Standard, one must first appreciate its core innovation, a feature that makes it unique among all assets in human history: decentralized absolute scarcity.

For five millennia, gold was humanity’s hardest money. Yet, its supply is not fixed. If the price of gold doubles, the incentive to find more of it increases exponentially. More mines are opened, more sophisticated technology is deployed, and more gold is inevitably pulled from the earth’s crust. Its supply is elastic, constrained only by geology and human ingenuity. In the future, we may even mine asteroids or synthesize gold in labs, further proving its supply is not absolute. The supply of fiat currency is even more malleable. It is infinitely elastic, constrained only by the will of a central bank’s board of governors. As the events of 2008 and 2020 demonstrated, that will can expand the money supply by trillions with a few keystrokes.

Bitcoin is different. Its supply schedule is written into its code and enforced by a global, decentralized network of tens of thousands of computer nodes that no single entity (not a government, not a corporation, not even its creator) can control. We know with mathematical certainty that there will only ever be 21 million bitcoin. We know the rate at which new bitcoin are created, and we know that this rate is cut in half approximately every four years in an event known as “the halving.” Around the year 2140, the last fraction of a bitcoin will be mined, and the supply will become permanently fixed.

This is a profound invention: the first asset with an issuance rate that is completely insensitive to demand and a supply that is absolutely finite. Bitcoin offers perfect, verifiable scarcity in a world of engineered excess.

This is not a policy promise, it is a programmatic reality.

This makes Bitcoin the first and only object known to man that possesses absolute, predictable, and unchangeable scarcity. This property is the anchor, the financial gravity around which a new, more stable, and prosperous economy can be built.

The Reward of Innovation

What would life look like in a society that uses a fixed-supply currency as its standard?

The immediate and most profound effect would be a shift from a world of engineered inflation to one of natural, productivity-driven deflation.

In our current system, the equation of exchange, M×V=P×T, is balanced by perpetually increasing P (the price level). Under a Bitcoin Standard, the money supply, M, becomes a known constant, its growth slowing to zero. As human innovation and technology (T, the volume of transactions or real output) continue to advance (as they always do) the equation must still balance.

With M fixed and T rising, the general price level, P, must fall.

Proponents of the fiat system immediately raise the specter of a “deflationary spiral” a scenario where falling prices cause consumers to hoard money, cratering demand and grinding the economy to a halt. This argument, however, dangerously confuses two fundamentally different types of deflation. The deflation to be feared stems from a catastrophic collapse in credit and economic activity, as seen during the Great Depression.

Prices going down because technology is making everything better is good, not bad.. but that’s NOT the mindset of the central bankers. They flood the zone with our own money anytime prices think about doing anything but inflating by 2% per year.

Not all deflation is bad! The deflation that a sound money standard produces is the beautiful, natural result of human progress. It is the deflation we have already witnessed with technology, where computers and smartphones become exponentially more powerful while becoming radically cheaper. This is not a sign of economic sickness it is the dividend of innovation being distributed to all of society. In a world underpinned by sound money, this healthy, benign deflation would not be confined to the technology sector; it would be the default state of the entire economy.

The price of a cup of coffee would slowly fall over the years, not because of a coffee bean glut, but because of more efficient farming techniques, logistics, and robotics. The cost of building a home would decrease as new materials and construction methods are invented.

Your money would buy you more tomorrow than it does today, not less.

This means that progress and productivity gains are passed on directly to every single person who holds the currency.

It is the direct opposite of inflation, which privatizes the gains of productivity for asset owners while socializing the losses through currency debasement for everyone else.

The Rebirth of Saving and Long-Term Thinking

This predictable increase in purchasing power would fundamentally rewire our economic behavior and our societal values.

Today, the system actively punishes savers. Leaving money in a bank account guarantees a loss of value to inflation. The “risk-free rate” has become “return-free risk.” This forces every citizen to become a reluctant speculator, pushing their capital further out on the risk curve into stocks, real estate, and complex financial products simply to outrun the silent thief. This creates a frenetic, short-term culture focused on nominal gains, fueling asset bubbles and market instability. It disconnects financial success from creating real-world value.

Under a Bitcoin Standard, saving would once again become a viable and intelligent economic act. The currency itself would be a savings technology. A person could work, save a portion of their earnings, and have confidence that their savings would retain or even increase their purchasing power over their lifetime. This restores the dignity of thrift and prudence.

This restoration of a low-risk savings path would unleash a torrent of stable, patient capital. A larger pool of real savings provides the necessary fuel for genuine entrepreneurship and long-term investment. Instead of capital being channeled into speculative ventures designed to front-run central bank policy, it would be allocated based on sound business plans aimed at creating sustainable value. Entrepreneurs would build businesses to meet real consumer needs, confident that their unit of account is stable and that their customers have real savings.

Innovation wouldn’t just continue it would hyper-compound, built on a solid foundation of accumulated capital rather than the shaky ground of perpetual debt. A low time preference would become the cultural norm, leading to more sustainable and thoughtful progress in all fields of human endeavor.

The opacity of the current financial system, with its “Ghost Money” and shadow banking networks, is a feature, not a bug. It allows for the hidden creation of credit and the concentration of risk in corners of the market that are invisible to the public and even to regulators, as the 2008 crisis revealed. Bitcoin, by its very nature, is radically transparent. Its public ledger, the blockchain, is a global accounting book that anyone can audit in real time. The total supply, the issuance rate, and every transaction are available for all to see. This eliminates the possibility of hidden bailouts, off-balance-sheet games, or the stealthy creation of money that benefits a select few.

This transparency directly combats the Cantillon Effect, one of the primary drivers of wealth inequality in a fiat system. The effect describes how those closest to the money printer benefit from new money first. They get to spend it before it has circulated through the economy and caused prices to rise. By the time that money trickles down to the wage earner and the small business owner, its purchasing power has already been diluted. This is a continuous, hidden transfer of wealth from the bottom to the top.

Under a Bitcoin Standard, this is impossible. New bitcoin are issued in a transparent, programmatic, and decentralized process called mining. They enter the economy through a globally competitive market, available to anyone who wishes to expend energy to acquire them. There is no privileged “first user.” Everyone operates under the same immutable monetary rules, creating a far more level and equitable playing field than the opaque and discretionary system currently run for the benefit of the well-connected.

Addressing the Haters

A transition of this magnitude is not without significant challenges, and people who are financially dependent on the old system staying dominant.

Regardless of their motives, it is crucial to address the primary criticisms leveled against a hard money standard.

Let’s battle a few of the biggest.

1. “Bitcoin’s price is too volatile.” This is perhaps the most frequent and understandable criticism. It’s also a misinterpretation of a transitional phase. Bitcoin’s volatility is a symptom of its rapid monetization, as a nascent asset on a free market discovers its price on the path to becoming a global store of value. It is a temporary state, not a permanent flaw. As its market capitalization grows from hundreds of billions to the tens of trillions currently held in assets like gold and sovereign bonds, its volatility will necessarily decrease. The journey is bumpy, but the destination is a monetary base with unparalleled stability derived from its perfectly inelastic supply.

2. “You can’t stimulate the economy in a crisis.” This critique views a feature as a bug. The ability to “stimulate” the economy through money printing is precisely the thinking that creates the long-term problem. While stimulus can provide short-term relief, it does so by debasing the currency, misallocating capital into unproductive sectors, and creating deeper structural imbalances and moral hazard. A Bitcoin Standard forces an economy to adapt in healthier ways through price adjustments and the efficient reallocation of resources from failed enterprises to successful ones. It is a more painful adjustment in the short term but leads to a more resilient and authentic economic foundation. It treats the disease, not just the symptoms.

3. “It will create a new aristocracy of early adopters.” The current system of asset price inflation is already the single greatest driver of wealth inequality on the planet. A Bitcoin Standard, while benefiting early adopters, offers an open, global, permissionless system. Anyone with an internet connection can participate on equal terms. Its transparent and predictable rules offer a far more equitable foundation for society than the two-tiered fiat system that actively funnels wealth to a financial elite.

The Choice

The path we have been on for the last hundred years is leading to a dead end.

We are trapped in a cycle of debt, debasement, and a desperate search for yield that has distorted our economies and fractured our societies. Continuing down this path promises more of the same: a slow, grinding destruction of the middle class, the punishment of prudent savers, and the increasing financialization of everyday life.

The alternative is to choose a new foundation.

A Bitcoin Standard represents a return to the principles of sound money, but on a digitally native, globally accessible, and absolutely scarce substrate. It is a system that rewards saving, encourages long-term thinking, and allows the fruits of human innovation to be shared by all through naturally falling prices. It replaces the discretionary rule of man with the predictable rule of mathematics.

This is not a technocratic fix, it is a philosophical choice. It is the choice to build our global economy on a bedrock of verifiable truth rather than a foundation of trust in fallible institutions that have repeatedly proven themselves unworthy. The transition will be challenging, but the prize is immeasurable: a more stable, equitable, and flourishing world, where progress is reflected not in rising prices, but in the rising purchasing power of every individual.

The idea of a “Bitcoin Standard” might seem strange, even radical.. but not as radical as the organized theft of our wealth since 1913 when the FED took control of the money printer and coordinated globally via the BIS with other central banks and policy making organizations. It challenges a century of established economic orthodoxy. But it is only by understanding its unique properties that we can see why it represents the only viable escape from the inflationary trap we have diagnosed. It is the antithesis of the current regime: a system of absolute scarcity, perfect transparency, and decentralized control, designed to protect value, not dilute it.

Fiat’s silent heist can be stopped. The solution is Bitcoin.

Sovereign wealth, in the hands of the people.

Friends: in addition to the 17% discount for becoming annual paid members, we are excited to announce an additional 10% discount when paying with Bitcoin. Reach out to me, these discounts stack on top of each other!

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I started Wealth Systems in 2023 to share the systems, technology, and mindsets that I encountered on Wall Street. I am a Wall St banker became ₿itcoin nerd, ML engineer & family office investor.

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