Runy Calmera on Nostr: M*V = P*Y M is the money supply V is the money velocity. How often money changes ...

M*V = P*Y

M is the money supply
V is the money velocity. How often money changes hands.

P is the Price.
And Y is Production.


Production
Im a world with technological innovation, Artificial Intelligence, and human ingenuity, global production, Y will definitely increase.

We become smarter and we produce more stuff. Food, houses, buildings, cars, computers and education.

More stuff in the world.

Fixed Money Supply
In a world of hyper bitcoinization there will be only 21 million Bitcoin ever.

Whatever we do, whatever governments and central banks want, nobody can change this.

M is fixed.

Saving and low time preference.

In a world where we save, V will slow down. People will think twice what they need.

Instead of buying that nice car every 5 years, would you save more and slow down your consumption?


If V slows down, and M is fixed and Y goes up, P has to fall.

Prices go down.

Forever.

You get more stuff per Bitcoin.

You get more abundance and the measuring stick is fixed.

You get more houses per Bitcoin. Or less Bitcoin per house.

Runy