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[This is a recap of a more expansive discussion of our monetary system including bitcoin. When the larger version is complete it will be posted here] Crypto currency appears to be a new development and a step beyond traditional banking as we know it. However, when you take a closer look it will be clear that this is not the case. In fact, crypto currency is in a way a full circle back to the day of gold and silver coins. In the olden days, coins were the medium of exchange, and a store of value as well as a unit of account.   As the global population and economic activity grew shortages and practical issues ensued.   As a result physical precious metals were replaced initially by receipts from the safekeepers, then by currency. Initially that currency was 100% backed by p recious m etals (“PM”s) then, over time less and less. The reason for this is not necessarily nefarious. If the quantity of currency is determined by the quantity of p recious m etals, the amount of gold/silver

As mortgage rates are decreasing and households take on mortgages with lower rates there are several consequences, not all of them obvious. The amount of interest paid, C.P goes down which at first glance is a good thing. The consumer now has the option to allocate the difference between the old and the new payment to other purposes. The downside of lower payments is that somebody else is now receiving less, and likely that somebody else is a pension fund, life Insurance Company or another entity which needs long dated cash flows. Chances are that as the homeowner refinances the NPV of his/her pension or insurance decreases at the same time. The economic effect of the increased cash flows to the household sector and the decreased cash flows to pension funds, life insurance companies et al . is not symmetrical because the household sector has a high marginal propensity to consume – they spend most of the savings – whereas the financial savings institutions buy financial assets (in