Oddbean new post about login | logout I disagree. Because (modern) equity requires governance control. Most modern “entrepreneurs” are cucked by their equity investors. Public and private and venture equity…they all control the entrepreneur. A good entrepreneur worth a damn won’t part with the equity. Which means most entrepreneurs will seek debt funding (priority claims) vs. giving up control and upside of their ventures.
Equity and debt instruments are going to look completely different on a fixed money supply. Almost all projects were financed with equity in the past. It was this fact that was the impetus for the formation of the federal reserve. To force people to fund with debt instead. The old system of capital investment will return when the money can’t be printed into existence.
I don’t think that is accurate. A lot of rich people who had gold reserves collateralized their gold for bank loans which were in turn invested in “guaranteed” priority debt claims on projects … which also included yields on projects. Debt (priority) claims are very attractive for numerous reason on a sound money standard.
It is exciting times we live in because only time will tell how this really pans out. #BTC is a much harder asset than gold. Keep in mind they’re digging 54,000,000 ounces of gold / year out of the Earth and if the price of gold goes up, that number goes up, but it doesn’t matter how high the price of bitcoin goes #BTC will only be 450 tokens / day. And that number will be reduced by two in about 3 1/2 years. #HODL #BTC #bitcoinstr
But that wasn’t the general trend. Society was moving to equity investments as capital. Also, more importantly, that bank was fractionally reserving their gold deposits. They created some portion of the loan out of thin air. There eventually will be no dollars to create out of thin air.