Primal needs padding. Just a little bit more space for the content to breathe and for the user not to drown.

The problem with deflation is that it leaves anyone with debt in a seriously precarious position. Because, unlike prices and wages, most debt repayments don't rise with inflation or fall with deflation. The debt just becomes a larger and larger proportion of a shrinking wage. This type of debt is called *nominal debt*. Here are some familiar examples of nominal debt: 1. Mortgage 2. Personal loan 3. Car lease For each one, the pounds you owe don't adjust with inflation or deflation. So if deflation hits, and wages fall, the nominal debt gets harder to pay. But the type of debt that fares worst with deflation is called *fixed nominal debt*. Fixed just means the payment plan is set in advance. For example, £1,500 every month for 5 years. Rigid. Locked. Hard to escape. A mortgage is nominal and fixed. So is a personal loan. So is a car lease. With deflation, nominal debt gets harder to pay. And when it's fixed you're committed to paying it, no matter how hard it gets. Hopefully, you can see that being trapped in a fixed schedule, paying back pounds that do not also fall when wages do, is catastrophic. The debt becomes a larger and larger percentage of your income until it becomes 100% of your income.

Inflation = Prices rise first. Wages rise second. Deflation = Prices fall first. Wages fall second. The order matters. Inflation = Your money buys less and less all the way up. Deflation = Your money buys more and more all the way down.

How Bitcoin can go down and still be a store of value? It's difficult for a new money to become a store of value, a unit of account, and an exchange of value at the same time. So, it happens in stages, in that order. Yes, Bitcoin's volatile. But we should expect that of a new money, as it goes through an adoption phase. To understand Bitcoin is to understand money, economics, technology, cryptography, and human nature. A tall order for most! So, at first people dip their toes in speculatively. They buy Bitcoin because "number go up". They don't plan to own it for long. They're trading Bitcoin for more pounds or dollars. Human nature dictates they buy it at the top of its bull cycle when greed and FOMO abound. And, sadly, it dictates they sell it at the bottom of the following bear market when China bans it for the 100th time and mainstream media declare it dead for the 1,000th time. But every cycle hardens a new set of Bitcoiners. It probably takes two to three liquidity cycles for people to realise what they hold. And that's if they put the work in. Every liquidity cycle it outperforms most popular assets that you might store wealth in. It outperforms fiat of course. It also outperforms property prices, gold, NASDAQ, and the S&P500. You can find individual stocks and riskier crypto bets that outperform Bitcoin, but you must consider the risk/reward ratio. It's a tough job to outperform Bitcoin over a liquidity cycle. So, yes, it's a store of value, but it's an immature teenager too. Bitcoin adoption will take time. Many Bitcoiners already use it as a unit of account too. If you measure the world in Bitcoin, over a long enough time frame (four to five years) everything gets cheaper. Every year you need less and less Bitcoin to buy the same property. A property that, measured in pounds, looks like it's getting more expensive. The trick is the property isn't worth more. The money to buy it is worth less. What you use as a measure is the key. Fiat has lost 99% of it's purchasing power since 1914. That’s the predictable outcome of a credit based monetary system. It must expand to avoid collapse, so your unit measures less over time. Gold preserved purchasing power across centuries. But it failed in the information age because it’s hard to verify, divide, and move at the speed of networks. That’s why paper claims on gold (credit) replaced physical settlement, re-introducing the very failure mode we hoped to escape. Gold's inherent physicality, something gold bugs like to use as a feature of gold, is in fact, a bug. Bitcoin is so foreign to us because we're used to money-as-a-store-of-value having another purpose. People store their wealth in property, which we also use to live in. They store it in gold, which can also become jewellery or be used in industry. They store it in fine art, which are also paintings to be hung on walls. Bitcoin is different in that it isn't anything other than money. Being money *is* its use. It confuses people because they're looking for an alternative use to give it value. I say, because Bitcoin is nothing *but* money, that makes it a superior form of wealth storage. Personally, I don't want my money any other way. And when it's only money, the way to value it is by the fundamental principles that make a good money. Scarcity, divisibility, portability, immutability, fungibility, auditability etc.

The Lessons of History by Will and Ariel Durant Chapter 9: Government and History In this chapter, the Durants chart the perennial struggle between freedom and authority. They how societies swing between central power and personal liberty, seeking an elusive equilibrium. So how do governments originate in the first place? Chaos and constant violence are so destructive that people eventually submit to some authority for protection. Early chieftains or kings arose because, in a warlike world, a strong leader and a cohesive state could defend a tribe better than loose egalitarian bands. “Power is always stealing from the many to the few,” the Durants remark. Meaning that in the name of security or efficiency, rulers tend to centralise power in their own hands. Over time, this can lead to tyranny or oppression, as governments rarely know where to stop in limiting freedoms. But, the Durants also show the other side: Too much concentration of power provokes backlash. When kings or governments become too abusive, over-taxing or trampling rights, people eventually resist. History has many cycles of despotism giving way to revolt or reform. For example, the absolute monarchies of France and Russia were overthrown in revolutions. Conversely, periods of weak government (like feudal Europe or the Chinese Warring States) eventually gave rise to strong central rulers to restore order. The Durants illustrate how forms of government evolve. Monarchy, aristocracy, democracy have each had their day, and often they rotate. They paraphrase Polybius’s idea of anacyclosis (cyclical change) though in plainer language. A new democracy may degenerate into mob rule, out of which a dictator arises (tyranny), which then might be overthrown and replaced by an aristocracy or back to a moderated democracy. Each form has virtues and flaws: 1. Monarchy can be decisive but may become tyrannical or inept if the king is bad. 2. Aristocracy (rule by a “best” class) can provide knowledgeable leadership but often slides into oligarchy serving only the rich. 3. Democracy allows freedom and creativity, but the Durants echo the warning that it can become chaotic or shortsighted, as citizens vote themselves benefits without long-term planning, or demagogues sway the masses. A particularly striking Durant insight: “The political machine triumphs because it is a united minority acting against a divided majority.” In simple terms, small, organised groups often wield disproportionate influence in government because the general public is not as unified or engaged. This is a lesson in civics the Durants highlight. Vigilance is needed in a democracy, otherwise special interests (or a disciplined party) can take over while citizens are apathetic or divided on many issues.

The only things that resist deflation are things with enduring, real scarcity and high demand. But they’re rare. Everything else should have become cheaper. Property, energy, transport, food, education, healthcare, all of it. For as long as entrepreneurs have used new technology to earn our money, which is forever, prices should have been falling. So if the free market and deflation are the inevitable outcomes of human nature, and human nature is enduring and unchangeable, we’re left with one plausible hypothesis. That the free market is *not* in its natural state. That something unnatural is afoot. That deflation has *always* been prevented. That falling prices have *always* been suppressed. That the system has *always* been manipulated. That we’ve *never* lived in a free market, because prices have *always* trended higher. You shouldn’t have to watch your dream home escape you. You shouldn’t have knots in your stomach when energy bills are due. You shouldn’t have to double take at your supermarket receipt. You shouldn’t have to decide between care or your career. You should be living in a world where every year, your money goes further.

Amazing! And thank you for the reply 😊

's famous line is: "The natural state of the free market is deflation." Here's why it's fundamentally true: The free market isn't a goal we may or may not achieve. It's the outcome of humans being humans. The free market is caused by human nature. Entrepreneurs will always compete to earn our money. And we’ll always only pay for things we value the most. So, to earn our money, entrepreneurs must deliver results that feel 10× better. That means lowering our total cost. Not just price. But also risk, effort, time, and access. Technology is how they do it. In both the physical world of matter and the digital world of information, technology lowers the inputs per unit and the coordination cost of work. In open competition, entrepreneurs can’t charge far above what it costs to make one-more-unit-at-scale, the marginal cost. And technology keeps lowering that marginal cost by removing labour, errors, materials, and time. So, left alone, prices tend to drift down toward those falling costs. Digital results fall fastest because once value is information, the cost of the next copy is near zero. Physical results still fall because better tools, designs, data, and flow reduce materials, energy, labour, and mistakes. Most modern results blend both, so digitisation drags matter along. As entrepreneurs compete to earn our money, they pass along the benefits to us. It shows up in three ways: 1. Same result and cheaper 2. Same price and better 3. Same price and more Each of these describe an increase in purchasing power. Your money goes further, which is captured by one word. Deflation. The only things that resist deflation and retain high prices are things with durable, real scarcity with sustained demand. Scarcity of time, place, uniqueness, and liability. Everything else should fall in price. Falling prices is the natural state of the free market. To disagree with this statement is to believe some, or all, of the following is the natural state of things. That people don’t try to improve their position or save time. That they routinely choose worse results at higher total cost. That change-aversion and risk-sensitivity don’t set a high bar, and that minor gains are enough to move crowds. That prices don’t reflect supply and demand. Or that those signals don’t attract entrepreneurial effort. That entrepreneurs aren’t motivated by profit or edge, and won’t chase high prices or undercut incumbents. That competition, when it appears, doesn’t squeeze margins, raise quality, or force better service over time. That new tools don’t lower inputs per unit—materials, energy, labour—or reduce coordination costs like idle time and rework. That learning curves don’t exist. That doing more fails to teach us how to do it cheaper or better. That digitisation doesn’t convert variable cost to upfront cost, and that the marginal cost of information isn’t near zero. That software, data, and automation don’t compress steps, cut variance, or lift use on existing assets. That measurement and feedback don’t raise yields or cut defects. That quality and cost must always fight each other. That even if costs fall, competition won’t pass savings on because tacit collusion holds and entrants never appear. That most goods face durable, inescapable scarcity, with sustained demand, such that the exceptions become the rule. That network effects, intellectual property, and regulation create moats so absolute that substitutes never emerge and power never erodes. That physics offers no slack left to remove. No waste to reduce, no designs to improve, no processes to refine. But if, like me, you find most of that hard to believe, the simpler, more plausible, view stands: Left alone, human nature will drive competition, technology will lower costs, and purchasing power will rise. The natural state of the free market is deflation. Prices of everything you care about should fall.

The Lessons of History by Will and Ariel Durant Chapter 9: Government and History The Durants chart the perennial struggle between freedom and authority showing how societies swing between central power and personal liberty, seeking an elusive equilibrium. So how do governments originate in the first place? Chaos and constant violence are so destructive that people eventually submit to some authority for protection. Early chieftains or kings arose because, in a warlike world, a strong leader and a cohesive state could defend a tribe better than loose egalitarian bands. “Power is always stealing from the many to the few,” the Durants remark. Meaning that in the name of security or efficiency, rulers tend to centralise power in their own hands. Over time, this can lead to tyranny or oppression, as governments rarely know where to stop in limiting freedoms. But, the Durants also show the other side. Too much concentration of power provokes backlash. When kings or governments become too abusive, over-taxing or trampling rights, people eventually resist. History has many cycles of despotism giving way to revolt or reform. For example, the absolute monarchies of France and Russia were overthrown in revolutions. Conversely, periods of weak government (like feudal Europe or the Chinese Warring States) eventually gave rise to strong central rulers to restore order. The Durants illustrate how forms of government evolve. Monarchy, aristocracy, democracy have each had their day, and often they rotate. They paraphrase Polybius’s idea of anacyclosis (cyclical change) though in plainer language. A new democracy may degenerate into mob rule, out of which a dictator arises (tyranny), which then might be overthrown and replaced by an aristocracy or back to a moderated democracy. Each form has virtues and flaws: 1. Monarchy can be decisive but may become tyrannical or inept if the king is bad. 2. Aristocracy (rule by a “best” class) can provide knowledgeable leadership but often slides into oligarchy serving only the rich. 3. Democracy allows freedom and creativity, but the Durants echo the warning that it can become chaotic or shortsighted, as citizens vote themselves benefits without long-term planning, or demagogues sway the masses. A particularly striking Durant insight: “The political machine triumphs because it is a united minority acting against a divided majority.” In simple terms, small, organised groups often wield disproportionate influence in government because the general public is not as unified or engaged. This is a lesson in civics the Durants highlight. Vigilance is needed in a democracy, otherwise special interests (or a disciplined party) can take over while citizens are apathetic or divided on many issues.

The natural state of the free market is deflation. In other words, if left in its natural state, if left alone, the free market, where entrepreneurs compete to survive by providing the most value, and where we vote for the winners with our money, where free decisions are driven by human nature, most prices should fall.