In the first post of this series, we identified the 5 components of a financial system and suggested that Zertify, Gamidox, and Exoquant would serve to simulate their functions in a parallel economy before ultimately being adopted completely.
In this post we will identify the hack on the Wall Street Financial instrument regime. Although exoquant is a bit technical, the basic hack is quite simple:
- Everyone knows that money is created through the creation of debt.
- Everyone also knows that debt is a promise to produce something more in the future.
- Everyone also knows that innovations increase human productivity.
- Everyone also knows that innovation is a promise to produce something more in the future.
Here’s the hack:
Therefore, a currency backed by debt and a currency backed by innovation are both backed by future productivity. As such, two currencies backed by the same underlying asset are fully convertible with each other. Water dissolves water and innovation dissolves debt.
Here is how the Wall Street algorithm works:
- People produce stuff in exchange for money
- Bankers do not care about money, they care about the rate of change of money over time. This is called the “interest” rate.
- Stockholders do not care about interest rate, they care about the rate of change of interest rate over time, this is called growth rate.
- Hedge fund managers do not care about growth rate, they care about the rate of change of growth rate over time, this is the margin on their bets; options, and derivatives, etc.
- CDOs and other financial exotica become increasingly divorced from the fact that people produce stuff for money.
The Exoquant Analogy:
- The value of information is derived from the rate of change of data over time
- The value of knowledge is derived from the rate of change of information over time
- The value of innovation is derived from the rate of change of knowledge over time
- The value of wisdom is derived from the value of innovation over time.