Greece was forced to borrow denominated in Euros during the speculative inflow of investment at the turn of the 21st century, but as Germany was more productive they benefited more from the Euro and Greece had no way to devalue their debt. So they are repaying the debt with a lower productive economy with massive egress of speculative investment.
The same problem with happen when the reserve currency for debt is SDRs and then all nations will be repaying their debts in SDRs while they won't have the policy tools to inflate nor deflate their debt burdens to respond to volatility in relative productivity and speculative ingress and egress of capital. Effectively they become a slave to the international central bank who can issue fractional reserve debt denominated in SDRs, which the banksters will surely have in their back pocket again. Just like the Fed now is pumping debt into the developing world making them short the dollar, then it will pull the rug from under them by raising interest rates sending the dollar higher and causing them to repay debt in more expensive dollars.
The only solution to this problem is for the Knowledge Age to rise and say "I don't need stored monetary capital, I need knowledge". I will quote from myself about this as follows.
The Rise of Knowledge
Quote from: iamback a.k.a. AnonyMint
Financeability of Knowledge
As explained in the “Economy of Knowledge” and “Energy of Knowledge” sections, knowledge doesn't exist now if it isn't dynamically adaptable in the future. The only systems in nature which can do this, are those that are composed of autonomous agents without top-down control, e.g. ant colonies, the neurons and synapses of the human brain, free markets, and unregulated social networks.
Due to aggregating and concentrating capital via an interest rate, as opposed to dispersing and scattering capital, finance mathematically must over time reduce the quantity of autonomous decisions (at least decisions about who receives funding to produce). Thus if financing were the predominant long-term trend, knowledge could not be.
The more potential energy in the knowledge capital, the more priceless it is sell its future. There are knowledge producers such as the creator of the open-source software movement, who absolutely refuse to work at any price where they don't have sufficient ownership of their knowledge, so as to prevent limitations of its potential future use. Due to the transactional cost Theory of the Firm which provides for the economic existence of the corporation, corporate capital accumulates by defending or increasing the transactional cost between otherwise autonomous knowledge producing actors. Thus increasing corporate control of knowledge is the antithesis of increasing knowledge. Knowledge can only increase by increasing the autonomy of the knowledge producing actors. This tension is depicted graphically.
Thus, finance and corporations are inherently ownership centralization paradigms. Whereas, knowledge ownership can not be centralized without destroying it.
For example, if a corporation purchased a huge library of software modules or books, written by different authors, the managers could create nothing with this without the authors (or others) who are knowledgeable of these modules or books. If these authors were not already organically interacting, then they would not be able to at any price, unless there was interoperability knowledge potential enumerated by some knowledgeable person(s). Thus always the knowledge is owned by the knowledge producers. When a knowledge producer is gone, the knowledge previously produced is destroyed, if it was not adopted by another sufficiently knowledgeable producer.
The Inverse Commons explains that unlike sharing of hard resources, the sharing of knowledge increases the value of the shared knowledge. Current knowledge becomes more valuable as it gains more future potential uses, and only autonomous knowledge actors can maximize diverse use cases of interoperability.
Software has minimal financing requirements, e.g. one or two humans with computers can write software that launches a $millions start-up. I did this once or twice by myself with no employees (e.g. CoolPage.com by 2001 if in Shadowstats inflation-adjusted dollars).
Knowledge Investing
Since the ownership of knowledge can't be transferred with money, financing incurs the risk of guaranteeing knowledge to spontaneously create itself where it did not already exist. No level of guaranteed interest rate can compensate for this lack of knowledge in the act of financing. What attracts savers to be passive capitalists is the economy-of-scale, where the due diligence effort (i.e. knowledge production) applied does not rise significantly with the amount saved (i.e. loaned) at interest. The collective politics will guarantee (insure) the return by debasing the money as necessary to pay for the lack of knowledge production— another evidence that financing is a centralization paradigm because knowledge can't be owned with money.
Whereas, equity investment has no guaranteed return and requires knowledge production.
“Equity investments” that are based on consistent dividends, are essentially a low knowledge production investment decision with a semi-guaranteed return similar to financing. It is instructive to note that as of 2008 “No stockholder has made a real inflation-adjusted penny in equity in Coca-Cola in 46 years.”.
Passive capitalists will find it nearly impossible to venture into high-tech knowledge investing, because they necessarily must approach it from the financing perspective, as their objective is to deploy large quantities of capital passively, i.e. to approach the theoretical constant marginal utility of gold. For example, Buffett's BYD (which makes electric cars) investment has performed poorly. A scientifically knowledgeable person knows that the energy-density of batteries is not ROI competitive with petrol.
One general rule for investing in knowledge production, is to invest close to what you know well. Because knowledge is inherently local and autonomous. If there is some popular investment theme, then it must have a very low relative knowledge production— the extreme case is depositing money in the bank, where the depositor doesn't even care how the money is invested.
The creator of the open-source software movement enumerated some business models that apply to knowledge production. The general concept is to not own the preexisting base of knowledge (it is always owned by the individuals and can't be transferred with money), rather to create a market for the services of the preexisting knowledge producers. In short, top-down fund some incremental advance in knowledge production and own the market for it. Remember that in the Theory of the Firm, corporations only exist where there is a transactional cost (barrier) to the autonomous knowledge producers achieving the same market organically. So the key is to identify these market barriers and invest to solve them.
Passive capital is financing those hard resources in the internet space, e.g. the massive server farms that serve the billion users of Facebook and Google, funded by collecting ad revenue rents on all internet activity— an implicit attempt to make knowledge capital subservient. Yet given the non-autonomous top-down control of thousands of knowledge producing employees, and the requirement to defend the transactional cost that sustains the corporate profit, Facebook and Google can't produce software diversity fast enough to service all the features that users want. Diversified software start-ups will flourish.
As explained in the “Economy of Knowledge” and “Energy of Knowledge” sections, knowledge doesn't exist now if it isn't dynamically adaptable in the future. The only systems in nature which can do this, are those that are composed of autonomous agents without top-down control, e.g. ant colonies, the neurons and synapses of the human brain, free markets, and unregulated social networks.
Due to aggregating and concentrating capital via an interest rate, as opposed to dispersing and scattering capital, finance mathematically must over time reduce the quantity of autonomous decisions (at least decisions about who receives funding to produce). Thus if financing were the predominant long-term trend, knowledge could not be.
The more potential energy in the knowledge capital, the more priceless it is sell its future. There are knowledge producers such as the creator of the open-source software movement, who absolutely refuse to work at any price where they don't have sufficient ownership of their knowledge, so as to prevent limitations of its potential future use. Due to the transactional cost Theory of the Firm which provides for the economic existence of the corporation, corporate capital accumulates by defending or increasing the transactional cost between otherwise autonomous knowledge producing actors. Thus increasing corporate control of knowledge is the antithesis of increasing knowledge. Knowledge can only increase by increasing the autonomy of the knowledge producing actors. This tension is depicted graphically.
Thus, finance and corporations are inherently ownership centralization paradigms. Whereas, knowledge ownership can not be centralized without destroying it.
For example, if a corporation purchased a huge library of software modules or books, written by different authors, the managers could create nothing with this without the authors (or others) who are knowledgeable of these modules or books. If these authors were not already organically interacting, then they would not be able to at any price, unless there was interoperability knowledge potential enumerated by some knowledgeable person(s). Thus always the knowledge is owned by the knowledge producers. When a knowledge producer is gone, the knowledge previously produced is destroyed, if it was not adopted by another sufficiently knowledgeable producer.
The Inverse Commons explains that unlike sharing of hard resources, the sharing of knowledge increases the value of the shared knowledge. Current knowledge becomes more valuable as it gains more future potential uses, and only autonomous knowledge actors can maximize diverse use cases of interoperability.
Software has minimal financing requirements, e.g. one or two humans with computers can write software that launches a $millions start-up. I did this once or twice by myself with no employees (e.g. CoolPage.com by 2001 if in Shadowstats inflation-adjusted dollars).
Knowledge Investing
Since the ownership of knowledge can't be transferred with money, financing incurs the risk of guaranteeing knowledge to spontaneously create itself where it did not already exist. No level of guaranteed interest rate can compensate for this lack of knowledge in the act of financing. What attracts savers to be passive capitalists is the economy-of-scale, where the due diligence effort (i.e. knowledge production) applied does not rise significantly with the amount saved (i.e. loaned) at interest. The collective politics will guarantee (insure) the return by debasing the money as necessary to pay for the lack of knowledge production— another evidence that financing is a centralization paradigm because knowledge can't be owned with money.
Whereas, equity investment has no guaranteed return and requires knowledge production.
“Equity investments” that are based on consistent dividends, are essentially a low knowledge production investment decision with a semi-guaranteed return similar to financing. It is instructive to note that as of 2008 “No stockholder has made a real inflation-adjusted penny in equity in Coca-Cola in 46 years.”.
Passive capitalists will find it nearly impossible to venture into high-tech knowledge investing, because they necessarily must approach it from the financing perspective, as their objective is to deploy large quantities of capital passively, i.e. to approach the theoretical constant marginal utility of gold. For example, Buffett's BYD (which makes electric cars) investment has performed poorly. A scientifically knowledgeable person knows that the energy-density of batteries is not ROI competitive with petrol.
One general rule for investing in knowledge production, is to invest close to what you know well. Because knowledge is inherently local and autonomous. If there is some popular investment theme, then it must have a very low relative knowledge production— the extreme case is depositing money in the bank, where the depositor doesn't even care how the money is invested.
The creator of the open-source software movement enumerated some business models that apply to knowledge production. The general concept is to not own the preexisting base of knowledge (it is always owned by the individuals and can't be transferred with money), rather to create a market for the services of the preexisting knowledge producers. In short, top-down fund some incremental advance in knowledge production and own the market for it. Remember that in the Theory of the Firm, corporations only exist where there is a transactional cost (barrier) to the autonomous knowledge producers achieving the same market organically. So the key is to identify these market barriers and invest to solve them.
Passive capital is financing those hard resources in the internet space, e.g. the massive server farms that serve the billion users of Facebook and Google, funded by collecting ad revenue rents on all internet activity— an implicit attempt to make knowledge capital subservient. Yet given the non-autonomous top-down control of thousands of knowledge producing employees, and the requirement to defend the transactional cost that sustains the corporate profit, Facebook and Google can't produce software diversity fast enough to service all the features that users want. Diversified software start-ups will flourish.
