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>Borrow when borrowing is cheap.

But make sure what you borrow generates more value than you will have to pay back, especially if interest rates are going to increase. And this is where the governments have failed, as they have expanded their borrowing over the last 15 years on what were record-low interest rates, but they haven't generated wealth for the average person or built the platforms required to stabilize, they have distributed it through various mechanisms and into the pockets of the micro percent. 


![image.png](https://files.peakd.com/file/peakd-hive/tarazkp/23x1KZ6ePMzJ2AY657kS5rirDv4Hy7rMH94oSNd3sKvDyWPFbaLokX51MjNpxMMEJUh6E.png)


But, as anyone with a mortgage knows, repayments need to be made on borrowed money and that is affected by interest. This is the same for governments too, which means if they aren't generating more than that, they are going to have to borrow more at increasing rates, where borrowing isn't as cheap.

And, when the governments choose to bailout financial institutions, which tend to happen when the economy is collapsing, they are borrowing very large sums  at increasingly poor rates. And that borrowing is coming from the taxpayers in the future, who will also have to cover the interest amounts incurred on top. 

>Pickpocketed in the Future. 

But imagine, you are going to get on a train tomorrow and know that someone is going to reach into your pocket or bag and take your wallet. What are you going to do? Will you try to prevent the theft? Will you *risk mitigate* by ensuring that your wallet is secure or perhaps, making sure that your wallet has nothing of value in it? Take a taxi instead? 

>Would you change nothing and just let it happen?

What could happen if there is another Financial Crisis?

![image.png](https://files.peakd.com/file/peakd-hive/tarazkp/23uFrsydskPkd2reBe1B69i3UYsQDDmcCdevT3MHYeQcnXHDAF8xA3cr2DsVnUPRVq6Kh.png)

It is an interesting thing to consider, because the Bitcoin network was created as a direct response to the events that led up and the response to  the crash in 2008. Essentially, it was created to build a decentralized cash system, with no central authority, or a single point of attack. Since then, it has obviously snowballed into other domains and the base technology has been reiterated and reimagined in many forms, that are used for different purposes. 

Will the response be new innovations? After all, necessity is the mother of invention, and we *need* a robust financial system that we can rely on, as the current iteration just isn't cutting it. Okay, it was doing the job for a long time, where it was making some people insanely rich and the vast majority increasingly poor, but that isn't the case anymore. There is too much volatility. 

And on that note, 
>What does 0.5 + 0.5 equal?
What does 0.01 + 0.99 equal?

*Equality.*

Wealth always adds up to one, no matter the distribution. 

But as we can see, distribution matters. The reason the financial markets are becoming more volatile, is that they are increasingly centralized, so that one mistake has massive repercussions throughout the entire network. In a decentralized economy where there is more distribution and less aligned activities, failure is more isolated and absorbed into the network, without it becoming cataclysmic. Even if a large entity on the framework collapses, the rest of the network will distribute that value to others within quickly and largely effortlessly, without centralized interaction, but decentralized cooperation. 

A decentralized framework is less efficient, but far more stable that a centralized. However, when it comes to "efficiency", there is a point that it becomes a liability, where adjustments made to meet incentive return, will eventually lead to error and that becomes highly volatile, due to the efficiency practices employed. And this is where we are in the current economy, where profits are the driving force for efficiency, and therefore expensive redundancy systems are not in place. 

For instance, Hive would be more efficient if there were fewer servers and they were all running on the same server system, but if that system goes down, there is no backup to keep it running. Now, Hive as a blockchain is relatively efficient, so running a Hive node is very cheap, but there is a multiplied cost still.

When centralization is applied to the entire economy without any fail-safes in place, failure becomes *very costly* indeed and the only redundancy system that can be called on, is the "pickpocket fallback", taking from our future wallets. And, they have set the system up to be able to spend our future money without us being able to protect the contents of our future wallet, because if we could protect it, we wouldn't pay. In the same way, that if your government asked nicely for another 10K this year from every single person in tax, people *couldn't afford and *wouldn't* give. 

>For reference, that would be 3.5 trillion dollars in the US. 

But, taking it from our future wallet where we don't have so much as even a wallet chain in place to protect us from the theft, those amounts can be taken out whenever they want to take it out. For example, in 2018, the US debt went up by 5 trillion, which is around $15,000 for every person in the country. 

This system is broken in so many ways and what needs to be realized is that in order to replace it, this one is going to have to break. That isn't a comfortable thought, because like it or not, our daily lives are tied to and intimately affected by the meta and when that changes, we get changed. However, like any change in history, some time down the path, things are okay again. But in this case, the "okay" has to start factoring in the entire population, rather than having only a miniscule amount of decision makers driving a maximization policy that promotes efficiency, at the expense of the majority. 

The world economy is currently imploding, and it isn't a controlled demolition. The cost of rebuild is going to be on us, so we may as well ensure that what is built serves our needs, rather than it becoming another ghetto system, where we are renting from the middlemen, with no control over what we own within their building. They can take it at any time.

Every loan that a government takes is a pickpocket of our future wealth and, there is not even an IOU left in return. There is an expectation that we will be okay with the theft. 

So far, we have been. What about tomorrow?

*The current system is on borrowed time.*

The wallets are getting protected, the pockets sewn shut.

Taraz
[ Gen1: Hive ]



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