Fiat in its current form is basically just centralized market making. The tradeoff is short term influence over market actors, vs accuracy of price signals over time.
In the near term we get lots of tools to steer society around as we please. Not enough spending? Punish savers with negative real rates. Too much leverage? Jack up the bid for money 600 basis points over night.
Prices are perhaps the most important data that we have in society; they allow us to communicate with the near future. When you see a clear market price, you are essentially understanding the supply/demand dynamic for the NEXT market good.
These fiat manipulations add information to all price signals, by manipulating both the supply and demand of money in aggregate. People would otherwise be aggresively persuing what society wants. In fiat we end up persuing what we SAY we want.
collin / Collin
npub190…rdkr9
2024-01-16 11:42:17
Author Public Key
npub190j8sw5hrcvwxe3fnvljnsujh97vruze8cszvmzu7wmr7p0t5raqerdkr9Published at
2024-01-16 11:42:17Event JSON
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"content": "Fiat in its current form is basically just centralized market making. The tradeoff is short term influence over market actors, vs accuracy of price signals over time.\n\nIn the near term we get lots of tools to steer society around as we please. Not enough spending? Punish savers with negative real rates. Too much leverage? Jack up the bid for money 600 basis points over night.\n\nPrices are perhaps the most important data that we have in society; they allow us to communicate with the near future. When you see a clear market price, you are essentially understanding the supply/demand dynamic for the NEXT market good.\n\nThese fiat manipulations add information to all price signals, by manipulating both the supply and demand of money in aggregate. People would otherwise be aggresively persuing what society wants. In fiat we end up persuing what we SAY we want.",
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