It's endlessly fascinating how economic datapoints get interpreted.

When I was in charge of a P&L, the guy who ran Finance for us and I had what we called the 'shelf plan.'

There were maybe 3-4 of us who knew it existed.

What's a shelf plan?
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What are prices?

A layperson’s guide to understanding charts and volatility.
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It’s an observable fact that price has nothing to do with value. Perhaps over the long term these two converge, but in the short term it makes no sense that the price of, say, soybeans would change 3-4% from day to day.

So what’s happening?
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You’ve probably heard people say “markets are forward looking” and that’s sorta true, I guess.

But that doesn’t mean they’re any good at it.

It might be better to say “markets consistently attempt to look forward” because that would be more illustrative of what’s happening.
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When a day-over-day price makes a 3% move this is not a 3% shift in value, it’s a 3% shift in *aggregate expectations about future value.*

And that makes sense, right? Expectations are pretty ephemeral so they can move fast.
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Consider volatility through this same lens. When a market is highly volatile, this means that expectations about forward value are evolving rapidly.

This happened in March when everyone got scared about Covid - it broke people’s forward expectations, and thus broke markets.
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Let’s talk about money and the State (Sovereign).

Since everyone constantly gets this wrong.
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So look: there never was a barter-centric state of nature.

That’s a nice story but when we look at the historical record, it’s just flat out false.

In point of fact:

- Debt predates money.
- Money predates barter.
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The way the Sovereign first got involved with debt was something like this:

King: “If you don’t give me 3 goats during harvest season, my soldiers will come burn your fucking house down.”

And in this way, the King originated a debt.

By fiat.
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But moving goats around sucks (horrible creatures) and is just sort of logistically annoying, so a new plan was devised, like this:

King: “Same deal with the soldiers and the burning and the profanity, but now it’s 50 pieces of silver instead of goats.”

Presto! Money!
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Money is a token that settles debts - always has been. The reason it’s useful is because it allows society to function like an abacus with N players.

In lieu of just the sovereign playing debt, these tokens are ‘debt settlement bearer assets’ which allow…well... the economy
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QE, Liquidity Removal, and the Alchemy of Money

I’ve been watching @MetreSteven say stuff like “QE removes liquidity” on here for a while after which people sort of stare blankly or roll their eyes.

Let’s give it one more go, via a traditionally quirky explainer.
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At the heart of every monetary system is an act of alchemy.

Let us start by describing this act: the act of monetary creation.

At the center of alchemy lies the Philosopher's Stone - the prime reagent for money creation.

For a long time this was gold.
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For if you had gold, you could lend against it.

From the Philosopher's stone of gold, we could spawn two things:

1. Circulating money
2. Debt

Money and debt are twins, both born of the philosopher's stone and their fates forever linked.
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For you see, there are rules which govern alchemy.

An alchemist is only allowed to create a certain amount of money for each philosopher's stone.

And the Debt was greater than the Money (due to interest), making the system inherently deflationary.
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And this deflationary nature drove the people to want more money in circulation.

So the rules of alchemy were evolved to allow each stone to create more money (fractional reserve banking).
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After much investigation and conversations with people on here, I’ve formed a relatively robust theory of what may be happening with Tether.

This thread will attempt to lay it out with neutral language for the purpose of discussion.
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Before we start, please note that ‘robust’ doesn’t mean ‘accurate’, it just means that:

1. the theory is internally consistent
2. it accounts for participant behavior

…but it’s important to remember that this is still hypothesis-stage thinking.
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First, let us note that the BTC ecosystem has clearly stated goals. They believe that:

1. Bitcoin is a new global reserve money.
2. They intend to create an alternative financial system around it.

Let’s just take them at their word and assume that’s directionally accurate.
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Next, a postulate: most people do not understand the current monetary system very well. This is exemplified by the “BRRR” meme and other variants of thinking which presume that the Fed prints money.

That’s not how the system actually works, as discussed elsewhere.
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In reality, what’s happening with the Fed is a bit more subtle and involves various forms of duration swaps and clerical activities that the populace at large gives more credence than those activities actually deserve.

Money is very complex.
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Why do we like blowing bubbles?

(This is not a bitcoin thread, go away)
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So I'm not a “neurotypical” (a fact discovered late in life) and while we won't go into the details here, the net output of that fact appears to be that I'm wired to take a more… ‘zoological’ approach to understanding humanity.

Hence the quirky Animal Planet threads.
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The distance afforded by non-participation in certain things (the weakness) also occasionally lends itself to a bit more subtlety with pattern detection (the strength).

And so I started painting a picture about bubbles.
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And in my mind’s eye there formed a cluster of ladybugs. They were happy, far from from eating aphids, and content on their beautiful tree.

And then one started flapping.
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At first the other ladybugs ignored it, but after a time its persistence was intoxicating.

And so a few more flapped.

And as is the way with exercise, certain endorphins were released

And it felt good to flap.
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🇺🇸#TreasonAgainstAmerica 1/12

🇺🇸#TreasonAgainstAmerica 2/12

🇺🇸#TreasonAgainstAmerica 3/12

🇺🇸#TreasonAgainstAmerica 4/12

🇺🇸#TreasonAgainstAmerica 5/12

I just keep being surprised by how many people expect all business to run as usual despite the fact that we're into year two of a worldwide pandemic.

Like.... anyone notice how many people's jobs got a ton harder? Or how many people lost their jobs, or the prospect of even being in the running for employment?

Anyone notice how many people now have massively heavier care responsibilities -- for children, parents, elderly relatives and friends, you name it?

Anyone notice the massive, unceasing level of stress that comes from mixed messages coming from govts, bungled safety policies and vaccination plans, endless lockdowns?

Every now and then I see someone miffed that some inessential thing hasn't gone as quickly or as efficiently as they'd have like, and I have to wonder -- are we living on the same planet?