kidmercury

One of the biggest problems in the world today is Keynesian economics.

Keynesian economics generally has a few principles that are remarkably wrong:

1. Commodity money is bad, fiat money is better
2. Deficit spending doesn't matter
3. Demand drives everything

But in reality.....

1. Commodity money prevents the financing of war
2. Increasing the money supply via deficit spending is taxation via inflation
3. Supply is just as important as demand

The latter is the most ridiculous part of Keynesian economics, its general disregard for money supply, and its naive belief that prices cannot rise above aggregate demand. If prices cannot rise above aggregate demand, there would never be stagflation or hyperinflation. (There has been, and there will be).

But Keynesian economics is about to redeem itself. Here's how.

How Keynesian Economics Redeems Itself

Keynesian economics is only disastrous in the context where central banking and control of the money supply is the ultimate scarcity. But eventually, the Internet will enable the creation of its own communities -- its own worlds -- complete with their own culture, community, assets, connections....basically everything you can get in the "real" world. And in fact the digital communities will use their wealth to create disruptions in the real world.

Because digital economies cost nothing to create, and because communities are a key scarcity of the digital economy, the next real scarcity is the community.

It's the people themselves.

And thus, because the people have become the scarcity, their demand has become the key scarcity.

As this progresses, even central banks have to submit to the demands of the people.

How will it get started?

I think virtual communities that use a virtual currency get the ball rolling. A whole bunch of these, all of which adhere to their own standards: technical standards, business standards, etc. It is how the nation-state gets replaced.

I know, I know. "Kid Mercury you are a kook yeah there are some problems in the world but it is not as bad as you are saying man I hate you"

Hey, don't blame me. How many times do I have to tell you: I'm just the messenger.

But give it a few years. The problems are by government, and government keeps making more of its mistakes, which is not so much mistakes as it is intentional theft. So they been stealing, they're stealing now, their rate of stealing is increasing, but people somehow think the cycle wll just stop.

Oh it'll stop alright. The question: will it stop because society chose to stop it or will it stop because it self-destructs?

So I guess Keynes was right: it is all about aggregate demand. Provided, of course, that we demand what's right.