Table of Contents
The History of Bubble
John Law was born into a family of bankers and joined the family business at age fourteen and studied the banking business. Law subsequently neglected the firm in favor of more extravagant pursuits and traveled to London and then to France to live extravagantly.
The wars waged by Louis XIV left France completely wasted, both economically and financially. The resultant shortage of precious metals led to a shortage of coins in circulation, which in turn limited the production of new coins.
In 1716, General Private Bank was set up by John Law that invented paper money to overcome coin shortage. Then he set up a Mississippi company to convert French government debt to wealth through its monopoly business.
General Pvt. Bank and Mississippi then instrumented the first-ever economic bubble called the Mississippi Bubble.
Overprinting of notes, a marketing gimmick of Monopoly lead at first the wealthy people in France to buy the shares resulting in the stock price rising. Then the common man started to join, putting their money in shares, leading to a further rise in the stock price. The word “Millionaire” was coined.
Finally, in 1720, the bubble burst when people tried to convert paper to currency. Son(You know who is Tiger’s Son), your 2019 vision’s “Soft” similarities with 1719 are just coincidences. Ok?
Are we in the middle of an economic bubble, and if so, how big is the bubble? Read this entire article to know the free ride that you are being taken to by those who owns money.
How Money Works
Financial Education 101
1. Seth, Ram, Shyam, and Smart are four people in a new town.
2. Ram and Shyam are hardworking and have $1 each. Seth is rich and has $10. Smart has no money but has connections.
3. Seth tells Ram and Shyaam, “look, I have $10 already, and take care of your money. If you give me your $1, I will give you $2 back after five years.”
4. Ram & Shyam gives $2 to Seth. Seth creates a Bank with $2(, not $10). The bank says, “Every person gives us $1, and if there are ten people, then I will have a total of $20. My value is $20 because soon there will be ten people in the town.”
5. Smart comes to the bank, “lend me $10, and I will take home with that, sell it for $100, and will give you $50 over the next five years.” Bank says yes, take $10 of loan out of my $20.
6. bank only has $ 2, but gives a debt of $10 to smart.
7. Smart to Ram, “Hey, even though you have $1, if you work a little harder, you can earn $3 next year. You make a home from the woods for me. I will give you $3.
8. Ram puts all his effort into constructing a home and happily takes $3. Smart spends another $3 for materials, and the home is ready for $6.
9. Shyam is so sad to see a rich Shyam having three times more money.
10. Smart goes to Shyaam and says, look, you may earn $4 next year. But for that, you need a good home. Take it home for $55.
Shyam, “but how can I have a home with $2 total”?
Smart:- “I know Seth; he has a bank and a lot of money; he will lend you, and I will give you a job for $5”
Shyaam:- $ 5? 😳
$55 becomes the negotiated price.
11. Ram and Shyam have deposited $4 to Bank, and the bank now has $6 in cash but $60 in debt funds.
12. Bank says we can lend you only $55 but you have to put $5 in your money.
13. Seth to Shyaam, work for me for an extra $5 in advance. Shyaam🕺🏻. Agrees. Seth gives $5 out of $6 Ram and Shyam had deposited in his bank.
14. Shyam buys the home for $55. Bank gives $50 debt(there is no money here).
15. Smart thinks he made a house for $6 and sold for $55 yeeeee.
16. Smart now deposits $5 (real money) to the bank and keeps $50(which is just debt as profit)
17. Ram:-😪 I worked so hard, but Shyam has the house and two jobs. He is so rich! He earns $10.
18. Smart:- Hey, don’t worry, Seth has to travel a lot; you make a car for me. ; I will invest(not a loan) $5 for making a car. Also will give you $5 from profit.
19. Shyam works 18 hours and makes a car in a year. The car costs $20.
20. Shyam sells the car to Seth. Seth takes a loan from the bank and gives $5 to Angel smart, keeps the car, and the rest is paid in debt.
21. Smart to Shyam here, take your $3(real) + $9(bonus). See, I gave you an extra $2?
22. This year, the bank has $12 cash. Seth has $22 cash. The economy is $120. Smart has $80. Ram and Shyam have $10 each.
Money
Money is therefore the quantified value of a human promise. The value of money, therefore, is equivalent to the value of a promise.
The brain wants to submit and remain under control
The Master-Slave Interdependency and Relationship
The human brain functions can not remain independent. It has to belong to something or someone. This highest entity act as an authority for the brain and keeps the brain disciplined. This authority can be God, can be nature, can be duty for the human race, or a supreme force much higher than humans. Every memory, thoughts, learnings in our brain is stored at different parts of the brain as a memory cluster and the brain connects these clusters with a context and purpose.
God acts like such an entity that keeps our brains focused and connected. When the brain doesn’t have this context and hasn’t understood well to whom it belongs, these clusters get disconnected. The brain finds it hard to connect different memories and information. A lot of energy is consumed by the brain for simple interlinking of the data. Neurons trigger much more randomly, leading to a condition called Neuroticism.
How the brain keeps the memory
- All the sensory data, such as visual, auditory, touch, and smell is processed by different sensory decoding sections of the brain.
- Then this data is sent to the linguistic section, where the data is converted into meaningful information.
- The information is then sent to our cognitive section, where meaning is derived from the information.
- Based on the initial meaning, our brain decodes emotion. Based on emotion, the hormonal state changes in our body, which results in a physiological change, that we can feel. This is called feeling.
- Feeling, Meaning, Raw Data, and Information are bundled and saved in different temporary locations, and a memory index is generated.
- This memory index is the memory relevant to the current experience. This memory management is done by a section of the brain called the Hippocampus.
- Hippocampus then store this memory bit in a temporary memory, as well as tries to compare this bit with our long-term memory stored in Cerebellum.
- If there is fear/threat perception, then Hippocampus passes on the threat message to a section called Amygdala, which manages the instinctive, instantaneous, and immediate action called fight or flight. This is also called the Reaction.
- The reaction now needs to make the body physiologically ready first by making the hormonal changes. Therefore, it is sent to the Hypothalamus section. Hypothalamus works as a messenger between the Endocrine(hormonal) system, and the Nervous system, including Autonomic Nervous System, which connects all the organs.
- Hypothalamus messages the pituitary gland to manage the hormonal state, as well as generate relevant electrical signals for our nervous system.
- Our Somatic nervous system then manages the muscle movements, which results in the way we react or respond physically.
- At the same time, the memory bit is sent to our Pre-frontal cortex section, where several analysis of the information is performed. This section solves any problems like threats and offers various solutions(called Ideas).
- All these continuous sets of memory bits are then combined through indexes like a garland, and store a single index as an Event memory.
- The brain then calculates the relevance of the event based on the number of hormonal variations, and stores the event in the long-term memory of the Cerebellum.
Because the data is not connected in such brains at a deep level, the brain tries to create a surface-level connection through a set of rules and behaviors which are together called the personality.
The supreme force to which the brain submits is often a metaphysical entity, which is not real, but a philosophy. And not every brain can become a philosophical brain. It is therefore hard for the brain to accept that it is under something that doesn’t exist.
Some of the top brains become philosophical and decode this conundrum. Such brains need an extremely powerful Prefrontal Cortex part of the brain. This is hardly 1-2% of the human race. They acquire deep knowledge, philosophy, spirituality, science, logic, and create values of morality, and build laws that other brains that are not as evolved can follow and live in harmony.
God becomes the master of these top men with the executive prefrontal cortex-driven brain. And these men become the masters of the brains with the less evolved prefrontal cortex.
The brain is only 3% of our body mass but consumes 30% of the energy. Thus when a brain becomes powerful prefrontal cortex-driven, it becomes a master; the body has to compromise energy. Human masters have powerful brains and rather weak bodies.
Master brain vs. Slave Brain
On the other hand, the not so evolved brains have a powerful body, but not so powerful brain. They find shortcuts and hard work as a means to prosper. Because the body is an asset to these people, they are extremely sensitive to mental pain. And because masters are submitted to God, they are extremely tolerant of mental pain but are sensitive to physical pain.
So, masters endure the mental pain and become the masters of those who can endure the physical pain but not the mental pain. So, masters, or the leaders become the authority for the strong-body but weak-brain individuals. Their brain submits to their masters. They are called slave brains, or simply slaves.
Masters consumes all the mental pain of the slaves and serve them through his brain and gives the slaves mental comfort by helping their brains to connect by submitting to him, the slaves give their physical labor and endure the physical pain to give their masters the physical comfort, so that they can study, learn, think, and plan.
So, the slave brains trust the master brain and believe in the promises of the master brain. But the slaves do not trust other slaves. The master brain remains stable, as it is submitted to God.
The problem is that physical labor can be seen and felt, but mental pain and labor are hard to be quantified. So the masters promised the submitted slaves that if they listen to them, and give their physical labor, they can design a better world for them.
Check out our podcast on master-slave dynamics if you want to learn more.
For example, a director is a master, who can see the movie even before the first line of the script is written. He promises the actors that if they act like this then the movie will come out in certain ways. The master, the director also promises the public that once this movie is made, it will entertain you, give you pleasure and take away a lot of your pain.
But the movie doesn’t exist yet. For the movie to entertain people, it has to be created. That would take time. So the master has to promise pleasure to the public, and the public has to give food and other facilities to the director for him to make the movie so that that movie can provide pleasure in the future.
Pleasure is important for body-governed people, as their brain can not endure pain and needs pleasure. So, if Spielberg, the director of Jurassic Park tells people that he would have to work in a movie for five years, which would entertain them, people will happily supply him with food and other needs.
Therefore, an Economy is a promise of a good future by the masters, and money is physical labor’s current worth.
A good promise= Future is really as good as promised after slaves have given their physical labor. Because the future is a promise, but the labor is real.
The economy is the worth of the promise and design of the future, whereas money is the unit of economy representing the current physical labour
In our first example, Seth controls the economy, Ram and Shyaam have the money, and Smart connects the money to the economy.
Now that, we understood that the Economy is a promise, whereas money is the labor, let us quantify the labor.
Quantification of Labour
We now know that the masters promise and design, and the slaves follow and execute. One can not exist without the others. Both take the pain, but the masters take the mental pain, whereas the slaves take the physical pain.
Energy is the amount of physical labor a body has to endure(for example hunting) to survive for a day. Our body can survive nearly two months without food. On average our daily energy need is about 2000 calories. People have to work for 10 hours every day, and 20 days a month, to ensure this daily calorie. Therefore our labor value is (2000 x 30/200) calorie/hour=300 calorie/hour.
Considering that body can remain without any calories for 3 months a year, then,
the labor value= 2000 x 300/(250 days(50 hours a week x 52 weeks) x 10 hours/day)
Labour Value=240 calorie/hour.Interestingly, if you walk for an hour, about 200 calories are the number of calories you will burn.
Therefore,
1 Unit labour money= 240 Calories
Having quantified the labor, let us now quantify the mental labor.
When we walk, the brain takes 20% of calories, and the body 80%(the brain takes a cut during physical labor). On the other hand, when the brain works at full throttle, it needs 80% calories, body cant survive beyond 60% calorie levels. Because hard mental work also requires immense physical energy, the body has to work at 70% and the brain requires an additional 80%, which is equivalent to 150% of the normal need.
So, brain 1 hour of work= 240 x 1.5
So, brain unit money=360 calories.Considering that creation, design, and then planning the implementation requires the complete project to be loaded in the brain all the time, and requires many intense operations, and considering that 5% of the population consists of the master brain, the 5 people have to take the mental pain of 95 people. So, the load on the brain of these 5 masters is 19x the load of an active brain.
Thus Master 1 Unit Energy=19 x 360 calorie=6840 Calorie;
Therefore, Master's 1 hour=6840/240=28.5 hours of a normal person.Economy=28.5 times the total money.
Because the Economy is Equivalent to total promise, whereas money in the economy is equivalent to labor,
On the next page, we will quantify both money and the economy based on the human population and current practice.
Total Economy and Total Money
The total human population is about 7 billion at this moment. We expect an average life of 80 years for this population.
Where 1 unit Energy=240 Calories.
So
the total calorie that we have to ensure today is 7 billion x 80 x 365 x 24 =4905 Trillion Units of Energy,
The total circulated money in the entire world at this moment is about $40 trillion.
Therefore $1 Economy=>122x Money, for the current population to survive for 80 years.
$1=29280 Calorie; 1 day needs
$1 Economy=19.2 days of average human life.
Because the average calorie per day is 2000 calories,
The poorest country in the world is Burundi. There the monthly wage is $903. On average $750 is the global number for a month’s survival. This is about $25/day. That roughly boils down to the same number, $1 for 1 hour or 240 calories. Because 5% masters of the world will have control over 28 parts of the economy, and the 1 part of the economy will be available to the rest 95%. So if the total economy of the world is 4905 Trillion Dollars hypothetically, then masters will control $ 4735 trillion dollars of economy, and the slaves $169 trillion dollars.
The current Economy can grow by 122 times.
Because, $1 Economy=Money X 122, total money will be Total current Economy/122, ie, only $327 billion. Masters will hold 28 parts and slaves 1 part. So, 350 million world population will control $ 315 real money, whereas rest 6.6 billion people will control $12 million money.
So at this moment, common 6.6 Billion people have only =$0.0018 real money, and 350 Million People have $1 Million each of real money.
$ 12 million real money / 6.6 billion population.
So, a common person has only 6.48 seconds of life at this monet, but the master have 114 years of life at this moment.
$1 Million per master/(365 x24)=114
Because it is the responsibility of the masters to ensure the life of the slaves, which they have failed drastically, masters have promised falsely to the slaves that they have 80 years of life. In simple maths,
| Money Bracket | Actual Money | False Promise |
|---|---|---|
| > $1 Billion | $10 Million (because the economy is supposed to be 122x the money) | 100 x |
| $100 Million to $1B | $60 Million | 150x |
| $1 Million- $100 Million | $50 k | 200 x |
| $100k-$1Million | $200 | 500x |
| Less than $100 k | $0.0018 | 55,555 |
Therefore the value of the promise=11,301x more than the actual value of a promise.
Your actual money=Your money/11,301
A human needs $24 to live a day.
Hence a Salary of $50,000 simply means $5 Salary.
The Economy has the potential to grpw by 122x, but it is already 11,301 times less valuable.
So, the Bubble Size of the Economy is 11,301x
Conclusion
Common people have taken for a free ride of false promises by the ones who pretend to be the masters. In reality, only 30,000 people have the responsibility to ensure the future safety of 7 Billion people. There are 350 Million Charlton and Shepherds who neither can work hard nor have mastery but have faked their mastery.
In the world, there are 11,301 Charltons per master(the creators) and each Charlton squeezes at least 20 common people’s blood. In simple Maths, every company has 11,301 useless lazy brains and bodies for 21 productive people.
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