The economy can be thought of as a complex orchestra. The industrial sectors are represented by the choir, strings, brass, wood and percussion. These sectors are all working together in the most harmonious way possible to create a seamless experience for listeners and for themselves. Each individual uses the tools at their disposal to add value to our collective experience.
In a classical orchestra we usually see a conductor waving his arms, which puts on a show for the audience, but also tells the individual musicians in the orchestra when to play and how. Many orchestral musicians prefer the convenience of having the insights of an orchestra conductor. Others argue that after practicing enough they can play flawlessly without the hand shaking vigorously. There is no such conductor in Indonesian gamelan music. All participants play together.
The parallel I am drawing here is between a centrally planned economy and a laissez-faire approach. Is it possible that the man in front of the audience is not as critical of the performance as his final bow might suggest? Egalitarians with a distaste for central planning may be inclined to say “Yes”. I’m not here to put my opinion on that topic, but rather to introduce the first metaphor as a supporting illustration for my second.
The hot potato and musical chairs work on similar mechanics, but in reverse. In a hot potato game, the goal is to get the potato out of your hands as quickly as possible so you don’t leave it in your hand when the music stops. In a musical chair game the goal is to sit on a seat as soon as the music stops.
Many of us have fallen into the delusion of not being able to fully understand the current economic game of the hot potato. The best players, of whom few are left, have developed very sophisticated moves and terminology to describe how they pass the potato from hand to hand. Quantitative easing and credit default swaps are great examples. As the game builds into dizzying verbal complexity, the rest of us are simply spectators with smaller bets on the outcome.
What I am witnessing from the president of the United States to the president of the United States and from a chairman of the Federal Reserve Board to the next president of the Fed is undoubtedly a game of hot potatoes. They vigorously pass their responsibility for the potato, but surely they know that one of them will remain with the potato in hand. The potato in the metaphor, of course, is debt. The US national debt is currently approaching thirty trillion dollars ($ 30,000,000,000,000) and this is just one of the many budgets involved in the mess. Writing or saying the word “trillions” doesn’t have the same effect as looking at zeros, does it? Trying to actually visualize what a trillion any physical object looks like can help you understand how hot this potato actually is. Unfortunately the player who holds the potato when the music stops isn’t the only one who will have to deal with the absurdity of this situation. Every living human on this planet will bear the brunt of the crumbling tower of debt that our political and financial institutions have fabricated.
Every presidential administration and every political party points the finger at their own opposition, arguing that they are the root cause of our current dilemma. The truth is that they are all responsible for the circumstances in which we find ourselves. Fans of both teams will be biased one way or another, but if you look objectively at the US legislative and fiscal history there is a tremendous flaw on both sides of the aisle.
Some will disagree, but it’s my opinion that hot potato isn’t fun anymore. The rules have become very convoluted, the number of players determining the result has progressively reduced over time and frankly I don’t care much for the original concept.
Looking back on my playground years, I remember situations where most of the kids in the sandbox were playing a game that didn’t interest me much. I had options at the time. I was free to be for myself and not interact with anyone, but that really defeated the point of going to the playground to begin with. I could reluctantly play with others even though I didn’t like it. Or I could start a new game and show others why it was more fun than the previous one.
Obviously, the global economy is managing risks far beyond what is considered the most “fun”. We are also considering the standard of living, individual freedom, life expectancy, infant mortality, war and famine to begin with.
For now, we’ll take a look at the grim reality and focus on having fun again. Today’s global economy maintains a state of affairs where the vast majority of the world is witnessing a game that isn’t fun for them. A simple measure of this could be that of the inequality found over time. At present, a very small percentage of participants have realized that there is an alternative game available. That percentage does not include all bitcoin users, but only those bitcoin users who truly understand the potential of what they are holding.
21 million chairs have been arranged in a circle and the music plays. Fortunately for us we don’t have to wait for the music to stop before we sit down. In our current version of the game it is not necessary to have an entire chair to be successful, but not having access to a chair would ultimately be a bad result. These chairs can be divided by 100 million and each player has the opportunity to have access to a portion of the chairs. Having more than one chair can give you the option to seat others you care about, or you can accumulate them for yourself. Such is the nature of the game.
Many people today have no idea how musical chairs work and are still obsessed with the hot potato game. Those are the no-coiners. Some people have a foot in every game wondering if they want to keep playing hot potatoes or if they want to indulge in musical chairs. These are the amateurs of “cryptocurrency”. Some people are well focused on musical chairs, but are still trying to pick up more chairs by risking the chairs they already have. Anyone who trades bitcoin or tries to earn interest on it falls into that category. Of course, the use of a cold wallet locks the chairs so that no one else can sit on them. These are the players who have already won.
Part of the fun is that as the international business orchestra continues to play, we don’t know exactly when the music will stop. Some will say that the music doesn’t have to stop. Some say that the hypothetical debt ceiling is infinite. They never heard the music stop or thought about how events might unfold in that case.
I made my choice as to which game I wanted to play long ago because I believe the music will inevitably stop. It might have happened in 2008, but maybe we’re getting an encore. There are no absolute limits to encores and technically the debt ceiling could be infinite, but does a rational human being believe these things can go on forever?
At the moment it seems that the conductor is pushing harder and harder, wriggling and sweating. Musicians are falling from their chairs in exhaustion and the semblance of harmony is turning into an avant-garde nightmare. Labor shortages, commodity fluctuations, extreme speculation, price inflation and overwhelming anxiety are the result of a global system pushed to the brink.
Who else is looking forward to some peace and quiet?
This is a guest post by Maxx Mannheimer. The views expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.