Saturday 12th November, 2022 -Magic Money All The Way Down

Another week of great javascript, tech and web development links

Nov 12, 2022

Another season 2 instalment…

I’ve spent a lot of time this week thinking about something really boring. It’s so boring that you hardly ever think about it. It’s always existed and so thinking about how it actually works doesn’t ever happen, at least not at any depth. I’m talking about it interest, the money that you get paid for saving and the extra money you have to pay back on loans. It seems so obvious. It’s just a percentage on the total amount. What’s so complicated about that? Not much.

Things get more complicated when you think about it in a macro context. How does all this extra money get created, and how does it flow through the financial system? It gets sort of complicated, and I’m confused about it, so don’t take any of this as fact, they are just my thoughts as I read, listen and learn about this stuff. There are likely loads of things I am misunderstanding or missing. But the fact remains, I don’t get it.

In a nutshell, here’s what I don’t get:

Surely interest only works if the system receives money from another system(s), while not giving money back to that system(s). Or money is printed, but that causes inflation, devaluing the money, which isn’t desirable. The extra money has to come from somewhere!

Let’s try to figure this out starting at the central bank. The central bank does a bunch of stuff but one thing they do is provide other banks with bank accounts. That’s right, banks have bank accounts too! I found that a bit surprising. Anyhow, the central bank loans money to the other banks. It has write access to their bank accounts, and basically just updates their balance. Tap tap tap on a keyboard, number goes up in the bank’s bank account.

The bank has to pay back that money, with interest, but the central bank gives the bank a really low rate. Still though, the extra money has to come from somewhere. So how does the bank make money. Well they loan that money out to regular people and businesses, at a higher rate. They make the difference between the rates. But where does THAT extra extra money come from I hear you asking?

That’s exactly what I am wondering. Well guess what, also consider that regular folks and businesses can lend out money, and since interest is the-thing-you-do, they charge interest too. So now it’s magic money on top of magic money on top of magic money. I know I’m making it seem quite dramatic, but it is actually pretty weird.

Of course people and businesses do also produce goods and services, but the fact remains that the extra invented money has to come from somewhere, because it wasn’t in the money supply before. And if we aren’t printing money, then the only other place I can think of is that it has to come from the outside, another money system. And if there isn’t enough of that coming in, then the money is going to come from peoples reserves, and clearly that’s going to hurt poor and vulnerable people more. They will get squeezed, they will go hungry, they will be cold.

And it’s the same for every country. Everyone is basically doing the same thing. Inventing money, which can only be paid back by taking money from other money systems. It’s permanent economic warfare between nations. It’s so crazy and we’ve only covered interest, there are much wilder financial instruments too.

Did I mention that the central bank makes a lot of money. The Federal Reserve in the US apparently makes money in the same ball park as Apple computers. That’s a lot of money! How can they be making money by inventing money? It makes no sense. At the very least it should be a non profit organisation.

Anyhow, interest, I don’t get it. It just seems like the entire economy is a massive pyramid scheme.

Jeff Snider is always going on about there being a dollar shortage. But I can’t see how there isn’t a shortage of every currency. Perhaps that’s why he’s so confident in what he says, because there’s always going to be a dollar shortage, and a Yen shortage and a Pound shortage etc…

And maybe the banks have loads of very clever models and algorithms, maybe they’ve figured out a way to move the money around so the interest gets paid back. I don’t see how that’s possible, but maybe it is, let’s for a second assume that it is possible. What about regular people lending money to each other? It might be small amounts, but it all adds up, and they aren’t running fancy financial models. How is that, in the aggregate just going to work itself out? There’s just no way.

I’ve got to be missing something, surely someone would have mentioned this issue about interest before now. It’s not rocket science. What on Earth is going on?

And then I thought to myself what if revenge is like interest? It feels like that sometimes. Things escalate, until they reach capacity and some poor sod goes crazy mad because they are having to do totally impossible things. Just a thought. Maybe things are hellish because we are making them hellish. Be kinder to each other and the revenge loans disappear. This part isn’t that well thought out, it’s just an observation.

Other thoughts and questions I have about money:

What is the minimum liquidity needed to sustain the human population of earth?
Is minimum liquidity more or less than current total money supply?
Total money in savings can’t be more than necessary liquidity else credit has to be issued, and then we get into the interest trap

Enough about boring money.

Development on my ssg continues. It was great to finally get the site rendering with real data, but so many small issues ensued. It was running for about 5 minutes when everything ground to a halt and all deployments got blocked. Turned out with the real data, I filled up my Github package quota pretty much immediately.

After much head scratching discovered I wasn’t compressing the data before creating the package to deploy. Thought I was, but I hadn’t used the tar -z flag, so evidently I wasn’t. I’ve fixed that, but the current problem is that the deploy to Netlify is taking anywhere between 7 and 45 minutes. At that rate I’m going to use up all my build minutes very quickly indeed, and I’ll be stuck again. I’ve posted on the Netlify forums asking what their recommendation is for sites with many small files.

With the real data running through the ssg, the logging became an issue again. There are thousands and thousands of small files being created and anything that gets output on each file creates an avalanche of crap to read through. I implemented a verbosity feature where you can set several different levels. I know there are existing libraries that do this but I haven’t seen any that work well with the DEBUG module. The verbosity levels seem to be working well so far.

I spent last night going through old blog posts markdown files removing liquid template syntax I had been using for styling lists and images. That will make a big difference to how the blog posts look. I have some minor CSS things that I need to figure out. For some reason the class I am using to remove bullets from lists isn’t working. The class is quite clearly on the <ul> tags, the rule is in the page head in a <style> tag. But it’s not styling the lists. It makes no sense. Frustrating.

Synchronicity-wise it’s been totally fucking horrendous. Almost everything is pushing against me. Maybe I’ll write more about that next week.

For those of you that came for this week’s newsletter titles list, let’s examine the inside of my head together, such fun:

Tekeshi’s Castle Ultra Ultra Infiniti Maximum
All Your Most Used Words Are Now Grey Gew
The Modern World: Eat the Poor
Interest is Money Creation
Self Head Autopsy
Let’s All Examine My Head Together!
Elf Face
Sex on a stick
The best thing, on a stick
The best thing, on a totally boring thing
Parallel fucking parking
The best thing, watched by somebody trying to do something average
The 90s: Adequately Ok
Liquidity, Bitcoin and Evil Interest
Are You Interested?
World wide tightening is coming
Break the West, Move to Bitcoin, Save the Earth
The Bitcoin Mega Squeeze
All Your Permissions Belong to Us
The Very Large Bitcoin Handbrake
Building Bridges
God Money vs Real Money
Interest is Magic Money Creation
Tighten Now or Be Tightened Bigly Later
The Kardashian Scale
Your Dance Times Tables
Royaal With Cheese
Untraining the Borg
Sun of S(AI Programmer)AM(s)
Genocide but at least not embarrassed
Double genocide-but-at-least-not-embarrassed out
Double self genocide-but-at-least-not-embarrassed out
Double-self-genocide-but-at-least-not-embarrassed-out stick
Younger maybe liar masters older maybe liar maybe lie maybe noop aka a lot of trust
Slowdown Inside a Bigger Slowdown
Headflushing Someone Already Being Headflushed Big Time
Worst of Both Worlds: Ven Diagram Hostage Slave Overlap King
Old People Out of Control
Where Does Interest Actually Come From?

There was this FTX crypto mega blowup this week. It’s like a big deal and everyone is all upset because ‘they said it was totally fine’. That’s literally been text in some of the articles I’ve read. So I write a newsletter, give it the title Everything is Totally Fine, see last week’s issue, inside of which I literally do a brain dump showing quite clearly what is going on, along with saying how f-ed up everything is, and a nice picture of a film about global thermal nuclear war, and it gets immediately thrown back in my face. Come on world. Seriously. There’s no way to communicate anything. We might as well just do everything using emoticons and windings, at least that’s a little bit fun. Some smiles before death is better than just death.

Podcasts

Bitcoin Can’t Loose with Parker Lewis WBD#576 (What Bitcoin Did Podcast) - I can’t exactly remember what was covered because I didn’t take many notes and I listened to it at the beguining of the week, but I enjoyed it and saved it so it must be good; he sounds like a young Brian Keating from Into the Impossible Podcast https://podcasts.google.com/feed/aHR0cHM6Ly93d3cud2hhdGJpdGNvaW5kaWQuY29tL3BvZGNhc3Q_Zm9ybWF0PXJzcw/episode/NTk2NDFhMjhmZjdjNTA5OWMxMmE1ZWRhOjVhMTgzMGQyZjk2MTlhZmE2YWYzOGYxODo2MzY0ZjdmNzcyMTg4YjA0MzVlMzMxMTc?sa=X&ved=0CAYQkfYCahcKEwi4pLi07qf7AhUAAAAAHQAAAAAQBA
I’m your Biggest Fan! (Freakonomics Radio Podcast) - A meticulous and fun look into fandom https://podcasts.google.com/feed/aHR0cHM6Ly93d3cub21ueWNvbnRlbnQuY29tL2QvcGxheWxpc3QvYWFlYTRlNjktYWY1MS00OTVlLWFmYzktYTk3NjAxNDY5MjJiLzE0YTQzMzc4LWVkYjItNDliZS04NTExLWFiMGQwMDBhNzAzMC9kMWI5NjEyZi1iYjFiLTRiODUtOWMwYy1hYjBkMDA0YWIzN2EvcG9kY2FzdC5yc3M/episode/NDRmZWJhOGYtMzkyOS00Zjk5LTgyZjctYmFmYTMwMWVmMTg4?sa=X&ved=0CAcQkfYCahcKEwi4pLi07qf7AhUAAAAAHQAAAAAQDQ
My Hard Labor (Fake Doctors, Real Friends Podcast) - This was a great come back episode, good to get my head out of tech for a few hours and listen to some actors talking about the important things that actors talk about https://omny.fm/shows/fake-doctors-real-friends-with-zach-and-donald/702-my-growing-pains
Software World Tour (Co-Recursive Podcast) - Some interesting stories about what it’s like to be a software dev in various asian countries, the scale of some of these operations is a lot bigger than usual https://corecursive.com/software-world-tour-with-son-luong-ngoc
The Story of Heroku (Changelog Podcast) - As I scramble to get my homepage off of Heroku before they turn it off, what better thing to do than listen to a story about Heroku! They did make some groundbreaking steps forward in web development, even if they are turning off the free tier unexpectedly, I found the service to be mostly good quality and reliable https://changelog.com/podcast/513
Mary Gaitskill on Subjects That are Vexing Everybody (Conversations With Tyler Podcast) - I don’t read much fiction, hardly any time for that, but I really enjoyed her interview, some very clear and insightful points of view from a different background than usual, delivered in a colourful way https://cowenconvos.libsyn.com/mary-gaitskill
Hallie Rallies, Nega John Exits and ‘Em Moore drops interviews by the score (Punk News Podcast) - Great high energy music selection in this episode interspersed by good old conversation https://audioboom.com/posts/8188758
Synth War (20000 Hz Podcast) - An audio adventure into the past, looking at how technology shaped the music we listen to today, how differing approaches to building hardware had a lasting influence on culture https://www.20k.org/episodes/synthwar
Bitcoin Policy Update w/ Jason Bret BTC103 (We Study Billionaires - Bitcoin Podcast) - It’s about policy and government and Bitcoin and CBDCs, and Preston getting even more flabbergasted about the world monetary system https://podcasts.google.com/feed/aHR0cHM6Ly9yc3MuYXJ0MTkuY29tL3RoZS1pbnZlc3RvcnMtcG9kY2FzdA/episode/Z2lkOi8vYXJ0MTktZXBpc29kZS1sb2NhdG9yL1YwLzYwb1B4NE5TaXhCaTZSdzlEMzRBV005Z0pxR3o2cWZZNFpKYVJDejNVZUU?sa=X&ved=0CAYQkfYCahcKEwi4pLi07qf7AhUAAAAAHQAAAAAQJg
Politics and laws changing tech in the US (Vergecast Podcast) - Echo chambers, free speech and CHIPS! https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5tZWdhcGhvbmUuZm0vdmVyZ2VjYXN0/episode/NTA1ZjZhNzgtYzY0Zi0xMWVjLTg5YWEtNjMzNWMyNjFmMTZm?sa=X&ved=0CAYQkfYCahcKEwi4pLi07qf7AhUAAAAAHQAAAAAQMg
The System that Runs Norway’s Welfare Payments (Changelog Podcast) - Big systems doing critical things developed in a northern european way https://changelog.com/shipit/78
UpOnly + Bankless (Up Only Podcast) - Much discussions and haphazard back and forth about the FTX blowup, a good balance of fun and serious IMO, also a very film worthy monologue towards the end by Ledger, it’s like Any Given Sunday crossed with the Goonies https://uponly.tv/uponly-bankless