Great question
When a bank issues a loan, it does not loan out deposits. It creates new money as a credit entry
You sign a loan agreement & it becomes an asset for the bank
Bank credits your account & the new deposit becomes new money in circulation
Banks are credit creators rather than intermediaries
Bank-created money is created with interest
Because the interest is not created in the money supply, the system requires perpetual growth, constant new debt or defaults
This is why the private credit system is inherently inflationary & extractive over time
Governments do not create new money to spend directly
They instead issue bonds purchased by banks, pension funds, foreign governments, or the central bank
This is government borrowing which is printing by selling promises
Government-issued money is also interest-bearing, which means it has the same inflationary dynamic as private bank credit creation
Tax serve 3 functions in a fiat system
1 Prevent inflation from excess government spending. If governments printed unlimited money, it would raise spending power without increasing production & create inflation. Taxes remove money from circulation, acting as a drain on the system
2 Give the currency value. If the government requires taxes to be paid in its currency, that alone creates demand
3 Redistribute and fund services. Funding services are not the main monetary reason, that’s the political justification. The monetary purpose is inflation control & currency demand
Governments spend money into the economy & taxes destroy part of that money to keep the system alive
This is the part people misunderstand the most
If new money is printed but does not create new goods, new services, new infrastructure or new real output, then you get more money chasing the same amount of goods, which raises prices
Examples:
Money printing for bailouts, war spending not tied to productive output, stimulus without corresponding output growth, interest-bearing credit expansion for consumption
This type of money requires taxation to remove excess money & prevent inflation
If new money is issued to create new productive output, the money supply increases in proportion to real wealth
Examples:
Building infrastructure, funding energy projects, paying workers to produce real goods & services or capital investments with measurable output
If production rises faster than money supply, no inflation occurs
In such cases, taxation is not required to offset the issuance, because real-world value backs the currency expansion
After the Weimar hyperinflation & Great Depression, Germany introduced Mefo Bills in 1934
It was a government-created promissory note issued to construction & industrial companies
They were not backed by gold, not borrowed from banks, backed by future labor & productive output & used to fund public work
Money was issued only when workers produced output
Idle labor was turned into productive labor
Factories, infrastructure & goods increased alongside the money supply
The credit carried no compounding interest & money was created only to mobilize productive capacity, not consumption or speculation
When money creation matches real productivity, inflation does not occur
Germany reduced unemployment from 30% to 0% in a few years without runaway inflation
Inflation problems emerged later only when issuance shifted to unproductive military expansion
Today’s system is a public–private hybrid
Banks create most money via credit, charge interest & expand the money supply
Governments issue bonds purchased by banks & central banks, borrow the currency they themselves issue & tax to control inflation created by both government & private banks
The government effectively outsourced money creation to private banks & then taxes you to stabilize the system for banks profit
They socialize the losses & privatize the gains.
It’s a ponzi scheme & you pay taxes to service the interest on banks debt.
@hodlwithLedn Poor form Ledn, you just couldn’t wait to report this once things have eased through, instead you put a target on your clients and industries back. You should be rather marketing how now is the best time to take out a loan instead. Amateur
It would mean a lot if you would sign this petition calling on @realDonaldTrump to pardon me and Bill
In 30 days we will report to prison. Unless the President steps in.
Developers shouldn't be liable for the actions of bad actors using their software
#freesamourai
https://t.co/xQNGAVlu3r
The DOJ’s money-laundering conspiracy charge against Samourai devs was DOA.
Their Motion to Dismiss cited caselaw that obliterates it.
No wonder the judge wouldn't let them argue it.
Thread destroys the “they knew criminals would use it” lie #FreeSamourai 🔥🧵 1/10
⚡️The coming bifurcation of the species.
I. The human species is undergoing speciation - not biologically, but cognitively and structurally.
This bifurcation is about adaptive compatibility with a world that exceeds the processing limits of the ancestral human mind.
There will be two groups, and they are already emerging:
1. Homo Systemicus
The minority who can interface with the modern/post-modern system**
Characteristics:
•high cognitive adaptability
•high pattern-recognition
•strong abstraction ability
•low emotional volatility
•fluent in technology
•able to coordinate across complexity
•can operate with AI as an extension of cognition
•can generate leverage, not labor
•self-directed, self-upgrading
•anticipatory rather than reactive
This group will:
•control technological systems
•control capital flows
•design the institutions
•shape narratives
•adapt fastest to AI, automation, and cybernetic tools
They will become a functional new species because their relationship to reality is fundamentally different.
They don’t live in the system.
They operate it.
They can compress the world into actionable models.
2. Homo Residualis
This is the majority who cannot interface with the new system.
Characteristics:
•overwhelmed by complexity
•reactive rather than predictive
•dependent on institutions
•labor-reliant, not leverage-reliant
•emotionally governed
•algorithmically shepherded
•lacks structural understanding
•trapped in legacy economic expectations
•vulnerable to automation shocks
This group becomes:
•dependents
•recipients of system outputs
•managed populations
•algorithmically mediated subjects
The world moved beyond human-scale cognition and this group cannot scale with it.
They will not disappear.
They will simply exist as the numerical majority while no longer steering civilization.
This is the bifurcation.
II. What causes the split?
Three irreversible forces.
1 - Complexity exceeds biological cognition
The modern world is:
•too fast
•too dense
•too interconnected
•too abstract
A normal human cannot “hold it” anymore.
This forces a split between:
•those who can offload cognition to AI
•those who cannot
2 - The collapse of labor as the human value basis
Old world:
•work → income → survival
New world:
•systems produce value
•humans consume value
This disconnect destroys the middle.
Those who adapt to leverage become elite.
Those who rely on labor become dependent.
3 - The rise of synthetic cognition
AI is not a tool.
It is a parallel cognitive species.
Not biological.
Not human.
But fully functional.
Humans who fuse with AI become post-human.
Humans who do not fuse become obsolete-function humans.
This is the real speciation.
III. What the world will look like after the split
A. The Upper Cognitive Class (Homo Systemicus)
5–20% of the population.
They will:
•control capital
•control AI
•control production
•design governance
•shape cultural narratives
•operate with 100x leverage
•live transnational lives
•have sovereign-like autonomy
They become:
•the new aristocracy
•the new technocratic priestly class
•the architects of civilization
They aren’t “elite” because of money.
Money is a side effect of cognitive compatibility.
B. The Lower Cognitive Class (Homo Residualis)
80–95% of the population.
They will:
•rely on UBI or transfer systems
•rely on simplified jobs or part-time labor
•rely on algorithms for decision-making
•rely on institutions for stability
•rely on media for coherence
•live locally, not globally
•remain psychologically overwhelmed
Not because they are inferior.
Because the world is no longer designed for biological cognitive processing.
This is the real divergence.
V. The real truth:
This bifurcation is already happening.
You don’t see it because it happens quietly:
•educational collapse
•fertility divergence
•cognitive stratification
•work polarization
•AI integration gaps
•emotional vs. rational stratification
•demographic sorting
•geographic sorting
•narrative sorting
The species is splitting into:
•those who can operate the future
•and those who will be carried by it
Biologically-cognitively-systemically.
This is the deepest structural truth of the 2020–2040 era.
@SimonDixonTwitt Went down this path, got the hardware etc but found setup too technically difficult and too scared to ask for help setting it for security reasons. Any suggestions?
@dotkrueger@jvisserlabs He did say IPOS are usually 6-18 months, and that Bitcoin would be sooner, also that 6 months of traditional IPO transition already passed. Hopefully you’re both right
@thepowerfulHRV What did you think of the earnings call? I like in the Q&A how Saylor pointed out that you need to be in BTC for 4 years to build conviction and be rewarded, therefore because MSTR is leverage BTC, it only makes sense your have a longer time horizon…