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.
Likewise:
- 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.
In order to “see” innovation before it happens, all we need to do is identify and measure rates of change of information in communities…and so on. Technically, this is a derivative, i.e., something whose value is derived from the value of something else. All of these metrics can be seen quite readily in the Zertify, Gamidox data sets. Each is a “derivative” backed by the stuff that people produce rather than the fiction of debt. The ability to predict future productivity is superior with an innovation backed currency and therefore superior to debt forced productivity – often compared to slavery.
The Silver Bullet
Innovation is a magic word. The hack is true to the Wall Street math as well as American culture. Anyone running for public office would not attack the proposition of an innovation backed currency. Therefore, the hack will not trigger an antigen.
The next and final post, The Currency Hack, will formulate this innovation currency in more detail.
Lisa_linke
I always have to read your articles a few times to understand what you are saying because I have just been recently learning about derivatives etc. I just brought this up on my FB wall the other day and two friends seemed to differ over the definition of the term. Thank you for this explanation. From what I gather in today’s world, wisdom does not seem to be valued but innovation is….innovation is valued because it brings money, which brings a higher rate of interest…I bet the stocks took a dip when Jobs died. I need to keep reading….
Dan
Thanks Lisa – this is pretty heady stuff. Most people don’t get it and if I am lucky, they ignore it. We really are going to build ZGE so I believe there is great cause for optimism, unless we trigger the antigen…..