Trust.

The one essential aspect of human development that’s kept the world moving for centuries. Trust does not morph or change, but the path towards establishing it was changed, perhaps forever, by the system we live in today.

You might be asking what caused this. The answer is simple, it is paper money.

People, Enterprise and Paper Money

Paper money is so detrimental to the development of human civilization that hundreds of years after its invention, it has left society permanently scarred. It is not trust that was damaged, but people started trusting less and establishing long term trust became more difficult at times.

Paper money has a complex effect mechanism that I'm going to attempt to describe here. First, paper money's issuance is always within the means of a government or state entity that wants control over its sovereignty above all, therefore it creates money out of thin air. By controlling the money supply it gains ultimate power over its populace and the markets that rely upon it. When it prints money, it devalues it over time and causes value-based destruction for those who work to create value and profit.

In this process, as the value producing human being now find himself at a bleeding value due to the increasing money supply, he must immediately spend the existing reserves in order to optimize value one gains for acquired goods. Nobody wants to end up with money nobody can spend because there is no value anymore behind it. Therefore, spending is the ultimate option. (When someone seeks immediate gratification of a need in the present it is called high time preference behavior. Conversely, when someone delays gratification for a better good in the future is called as low time preference.)

This has now reached such levels in the world that in some countries it is a normal daily activity for a family to use lines of credit to purchase goods and services. Because the value evaporates today, they must spend the future's income in order to be able to receive goods that are of good value today. But why would a company want to receive money that loses value? It in fact stores that in small reserves or often times no reserves and/or invested in stocks or equity. Since investors of these companies are also often consumers who hold large amounts of shares, they expect profit to be produced by the company they hold shares in to make gains on their investment. If a dividend is paid, a higher and regular one.

By having high time preference investors within a company, we already achieved a self-reinforcing effect for increasing profit and demanding more money from consumers that they are influencing with advertising and other means. When a consumer wants one of their products they now must use a line of credit or deplete their savings in order to acquire it. A company can easily inherit high time preference from its investors because if a company does not produce profits, its shareholders will likely replace its managers and CEOs who are inefficient just to keep profiting. Therefore, a company always seeks satisfaction of its own needs before the needs of its consumers. (Yes, the needs of its shareholders economic wellbeing equals with that of the company's wellbeing.)

A bad credit rating due to the lack of profit is the ultimate demise for a company that will be unable to compete and unable to expand to find new opportunities for profit making. But since companies are not investing into good products, but decreased quality products at a higher cost lacking innovations, do their products warrant the amount asked? Perhaps not. The form of predatory exploitation for bogus innovation is now rampant in our world where companies race out to create new products of inferior quality, designed to break over time, and impossible to repair due to a company's monopoly on the production and sale of its parts required for its repair. As more profits are demanded a company leans towards becoming more monopolistic and anti-competitive. (More saddening still, ever since the Federal Reserve came to power, technological innovation began to decline dramatically. Fewer new inventions created, more time required and more expended resources to make new inventions. This is why we have the same old iPhone every year just with improved components coming back every year.)

As anti-competitive behavior becomes rampant, what can a company do at that point to increase its influence? Start participating in politics.

But before we got that far, let’s look at another factor in our problem. It is not only a producing entity which can be a company which creates something physical, but a service offering entity like a bank.

Banking

A private enterprise in the form of a bank is controlled essentially by a central bank and it must abide by its regulations. For example, the total reserve ratio is set by a nation central bank.

Up until the beginning of the 1970's deregulation trends of residential and commercial investment banking were separate. As the two branches began merging, much riskier trends started appearing in company operations, and bank failures happened more often.

Long gone were the times when a parent could teach their children about the importance of savings in their own personal “piggy bank”, since now banks often provide absolutely no noticeable interest, or charge exorbitant fees for insufficient funds in an account.

The banks also inherited high time preference, but it is more inherent in the nature of money than dependent on those who invest. (Although exceptions apply.) Therefore, banks have discovered fees.

Fees provide massive profits for these banks, used to deduct billions of dollars yearly from accounts. Ranging from general account fees, overdraft charges to check deposit fees. They have become inventive with their way to pull more out from their customers. Ever since this mentality of fees was adopted by banks, customers have become products that a bank must convince or coerce in some way to pay for their products or acquire loans.

The 2008 Financial Crisis showed us that over consumption can easily lead to financial bubbles. Mortgages taken out for homes saw foreclosures during the crisis. Irresponsible investments made by banks are were condoned by their shareholders which were in turn reinforced by national central banks’ deposit insurance schemes. The FDIC, for example, does not prevent a bank from being irresponsible with someone's money. To the contrary, they go full speed into investments that are risky and could potentially lead to its fall, similar to Lehman Brothers when the Secretary of the Treasury didn’t bail out the bank, allowing it to fail.

Repeat lending, rehypothecation and bad borrowers combined lead to the financial crises.

Since banks are now clearly not there to serve us but to churn us as products, is there even trust in the financial system anymore?

High Time Preference

As a Central Bank reinforces high time preference behavior by issuing more money and expanding the money supply, it directly enables and contributes to the detrimental effects of paper money. High time preference itself is a disease, created by the loss of value in a fiat currency that a central bank devalues directly. The above examples are all direct relatives from this origin and as of today no one is about to back down from printing more money.

The lack of choice that this environment creates kicks us into survival mode, which prompts us to seek satisfaction all the time. Only by reintroducing the option of saving money can the  slow and painful process of reverting the problems caused by high time preference be achieved. Even if we would immediately switch over to bitcoin, today's issues would linger around for many more decades before a return to normalcy would occur.

But even today the Federal Reserve’s given out over 9 Trillion USD worth of loans within just 1 year, printing out over 25% of the total US Dollar supply in its entire existence! The end in sight for the destruction through paper money is nowhere to be seen.

The Co-factors

To make matters worse, it is possible that we stand before a total political makeover of the world. As the Great Awakening is slowly happening, more and more people will notice the negative effects of the loss of value they are experiencing. But there are many out there that are still light years away from the truth, and many more who will never be able to understand it.

The expansion of the money supply is what creates inequality directly. Money spent on Social Security and other government programs directly contributes to poverty. This basically pushes more money towards the 1% and creates dissent and pushes individuals towards the rejection of capitalism because the government itself is the one that destroys their money through inflation. As more reject the prospects of this type of capitalism, more increasingly turn towards socialism and communism. Today in America, education is used as a weapon to indoctrinate people into politically "acceptable" norms that are more aligned with their Marxist world views that promote socially divisive education. This way we end up in education with programs that promote critical racial theory, gender theory and intersectionality.

Socialism is now deeply coded into the education system and it is manufacturing experts that stand by those views and promotes groups that attempt to destroy America. For example, BLM and ANTIFA. As more money is created more people will get radicalized and will likely enter such groups, but it is not their fault. It is the system's fault that it is happening. Let's look at some past events to understand this better.

Hungary was excommunicated from the community of nations for its participation in World War I as part of the Astro-Hungarian Empire. It saw 60% of its territories lost after the war due to a plan created by the French and the British to make the region ethnically divided and conflicted. Ethnicities received independence and hostile governments like the French established Anti-Hungarian governments and national narratives (for example in Slovakia).

After the great depression, and as Hungary had no ability to trade or have allies anywhere, the only option left was to partner with Germany and get close to Adolf Hitler, which turned out to be a massively bad idea which it attempted to exit later on, but were ultimately occupied by Nazi Germany because of it.

If you are given no other options, what else remains? Of course, after the war Hungary was taken over by the Soviets and occupied for decades, which saw it get almost completely annihilated economically.

In a previous post of mine here on Citadel 21 named "The Red Terror" I have already described the dangers of socialism and communism, but we didn't fully link it together with this effect.

It is what it is, and we must name it. In the United States, it is the Federal Reserve that creates this effect directly. It effectively breeds communism with every dollar it prints out.

This shift in political ideology is then picked up by neo-liberal politicians who aim to get into politics at all costs. Today's Democratic party is no longer what it used to be and has transformed into a leftist establishment that is unable to reach compromises and demands everything to happen immediately, in its own high time preference format. Additionally, their "partners" on the opposing side also are unable to compromise anymore due to the divergent ideology and unacceptability of those views. This infighting allowed Donald J. Trump to become the 45th President of the United States. Because there was a silent majority of people who were left behind by the left itself who claims to support the people. This love for the people, it turns out, does not extend beyond the limits of large cities and metropolitan areas.

It's a mess that we live in, but let's just now add the cherry to the cake!

The News Media

The television (and before the radio) for years has been the foremost source of information for people who wanted to get news about the state of their environment, their nation and the world. It was a respectable institution that over time fell from its path of unbiased reporting and commitment to the exploration of truth.

It has become a farce that accelerates the self-reinforcing connection between the media and the political establishment. For years the television was the only source to oversee politicians and hold them accountable for their actions, but it is no more. We have entered a new era that is passed beyond that of facts and truth. As more and more people become interconnected on social media now (Twitter, Facebook, etc.) the spread of information accelerated.

Today, leftist fact checkers attempt to sow doubt over tweets on Twitter or outright delete posts from Facebook that do not conform to their world views. News media channels have become biased. They now have hidden political agendas with which they associate, and are no longer impartial on political matters. This is dangerous to our democracy, truly. When we are unable to hold politicians to account because our news outlets are biased, we lose control over our reality.

This loss of control over our reality allows politicians to be corrupt, allowing central banks to control us more with the expansion of the money supply, which in turn destroys everything else it touches.

When we look at the bleak data coming out in the past 50 years, we can see that there are now more young adults living with their parents long term. Fewer babies are born because careers are more important, or a family can't even sustain itself to be able to raise a child. People don't save money because there won't be anything left anyway after inflation runs its course.

If at this point, your trust in the system hasn’t entirely collapsed, you are either a statist or a communist.

Without Bitcoin, the world of today would look like it is heading to the end game. But since Satoshi Nakamoto created the greatest invention of mankind, a financial system that is independent from that of governments and their manipulative behavior, we have a shot at fixing the whole world with it.

When we talk about trust, it is of trust in the underlying system that we must focus on, and this affects regular trust for the average Joe downstream. These problems keep reinforcing themselves and the only cure for them is to feed it all to Bitcoin. Let it suck it dry from financial resources to operate. This will of course permanently change society, for the better, but don't expect governments to let it happen without a fight.

The system that bitcoiners elected to use is completely incompatible with the financial system operated by national central banks, and will likely require a full reformation to change the system for the better. Until then, we can hope that the currently exhausted social capital will be restored in order to kickstart back technological innovation, inventive human ingenuity and the spirit of entrepreneurship.