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Right. In essence, I think these details of the redistributive function are what make it Ponzi-like or sound. On one end of the spectrum, you have personal and

Right. In essence, I think these details of the redistributive function are what make it Ponzi-like or sound. On one end of the spectrum, you have personal and "defined contribution" saving and investment schemes: the individual carries a personal pool into their later years where they draw it down. How are differences between the contribution+performance and lifetime needs reconciled? Estates pass inheritances or individuals are bankrupt and we recursively ask ourselves what sort of system will cover their needs. In the middle, you have what I think you want. An insurance pool redistributes the contributions, performance, and needs among a cohort. How are the aggregate assets and lifetime needs of the cohort reconciled? Contributions could be curtailed in response to excess accumulation or increased to cope with unexpected needs. Like any insurance scheme, the risk management has complexity around managing liquidity in the face of time-varying needs, contributions, and investment/economic performance. But what skeptics see is an ugly reality unfolding further down that spectrum. Population growth and the long delay between contribution and withdrawal is (either naively or willfully) misinterpreted as excess accumulation. This is used to justify either insufficient contribution or "theft" of assets to fund other initiatives than the insurance pool. This leaves a hollowed out pension systems with defined benefits that cannot be satisfied with their meager holdings. As with a Ponzi scheme, they appear to work while the incoming contributions from an ever growing cohort are used to pay outgoing benefits to an earlier, smaller subset of participants. They collapse when the participation rate fails to grow fast enough to meet the ever growing needs of the aging cohort.

przeor 5y ago
Every aspect of life is related to population distribution graph which is doomed in Europe. Even if you save your retirement in a real estate, it's value is tightly correlated to amount of people in productive age when you try to sell it. The only thing that can save one, is to start saving money early and give it to componding effect. Albert Einstein once said “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it”. Anything else wont work because demographic at least for europe is bad. The good information is that to make componding effect to work, crypto is much more compund effect friendly asset in the world. Of course, in the mean time you need to use your brain to not lose your priv key or being phished etc. Good luck
- saltcured 5y ago
  Under these population curve assumptions, doesn't crypto have the same inflationary risk, as a share of future economic value? It's not a technical characteristic of the financial instrument, but instead a basic imbalance between a net supplier and net consumer generation. A bunch of retirees holding crypto tokens is only rational if there is a reason to believe that a bunch of future kids would see value in those tokens. Just like dollars or euros or yuan. If the future population does not drive a large enough economy, there are dwindling products and resources available to swap for all existing financial instruments. These real resources are things like clean water, food, medicine, shelter, energy, technology, and services which cannot be stored over a person's lifetime and then consumed decades later. It seems to me that the instruments with meaningful value in this picture are those rooted in a right to capture future production. That is things like ownership shares in continuing business enterprises, industrial infrastructure, natural resources, buildings, and developed land for housing and commerce. Of course, infrastructure and buildings decay over time, but they do represent a kind of real stored value for a planned service lifetime. An actual plan to take care of a shrinking population would need to think about how automation can increase the efficiency of production such that a smaller future generation can generate sufficient output to satisfy the needs of the whole population including the elder non-workers. To avoid the Ponzi threat or more generally the "musical chairs" game mode, this plan needs to accomodate continous, incremental decline. The important technological and cultural skills to operate this system need to be passed down to ensure continued production for all who remain alive.

przeor 5y ago

Every aspect of life is related to population distribution graph which is doomed in Europe. Even if you save your retirement in a real estate, it's value is tightly correlated to amount of people in productive age when you try to sell it. The only thing that can save one, is to start saving money early and give it to componding effect. Albert Einstein once said “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it”. Anything else wont work because demographic at least for europe is bad. The good information is that to make componding effect to work, crypto is much more compund effect friendly asset in the world. Of course, in the mean time you need to use your brain to not lose your priv key or being phished etc. Good luck

saltcured 5y ago
Under these population curve assumptions, doesn't crypto have the same inflationary risk, as a share of future economic value? It's not a technical characteristic of the financial instrument, but instead a basic imbalance between a net supplier and net consumer generation. A bunch of retirees holding crypto tokens is only rational if there is a reason to believe that a bunch of future kids would see value in those tokens. Just like dollars or euros or yuan. If the future population does not drive a large enough economy, there are dwindling products and resources available to swap for all existing financial instruments. These real resources are things like clean water, food, medicine, shelter, energy, technology, and services which cannot be stored over a person's lifetime and then consumed decades later. It seems to me that the instruments with meaningful value in this picture are those rooted in a right to capture future production. That is things like ownership shares in continuing business enterprises, industrial infrastructure, natural resources, buildings, and developed land for housing and commerce. Of course, infrastructure and buildings decay over time, but they do represent a kind of real stored value for a planned service lifetime. An actual plan to take care of a shrinking population would need to think about how automation can increase the efficiency of production such that a smaller future generation can generate sufficient output to satisfy the needs of the whole population including the elder non-workers. To avoid the Ponzi threat or more generally the "musical chairs" game mode, this plan needs to accomodate continous, incremental decline. The important technological and cultural skills to operate this system need to be passed down to ensure continued production for all who remain alive.