Currupt Capital Gains Tax (CGT)

As modern economies develop and become more financialised, I say zombified, increasing amounts of wealth come from capital gains. Logically governments want to tap in to these gains and it seems to make sense as it can act as a damper for rampant speculation, wealth inequality and capital valuations gone mad.

The thing is practically all this capital gain is caused by government policies which print money. Capital gains tax (cgt) ends up collecting more if the government inflates more. Which is a moral hazard and brings the whole nation into a ponzi. CGT encourages a cycle of business and government that moves more and more money into unproductive activities, capital speculation, government stimulation programs and fiscal irresponsibility. If you have CGT and it forms a significant part of your countries tax take, it is a sign something is wrong, its not healthy for an economy. Its an economy feeding on its own financialisation and it can't last on that alone, it needs more and more leverage to survive.

We see this in many developed countries. The intent of policy here often contradicts the actual effects. You get people doing nothing and just holding assets and governments destroying the value of currency (which destroys the value of employment contracts). You get more speculation and wealth inequality, not less.

Often the reason that CGT have been instigated is because the governments tax take from other methods has fallen and they need to fund things. The capital base of the country is high, but the economies are failing to grow and so pumping fake money into the system and collecting the overflow is attractive. Using this mechanism they can extract as much wealth from society as they like and as the countries capital base, built up over centuries is very deep a lot of money can come out without it being immediately noticed. This sly roundabout tax is very corrupt and only limited is our resistance. Resistance is also minimal becuase this on face value appears to impact the minority wealthy. The wealthy however employ debt and other mechanism to avoid this and what it really does is suck capital investment out of the economy which harms everyone.

Put plainly the government can use CGT to extract value from the public by making their house prices go up so much that their wages pail in comparison. House ownership becomes a persons main economic activity by the numbers. When the house is sold the government collect their percentage, the more its gone up the more they collect. The person still needs to live, and if they don't buy a house they don't participate in the inflating asset and this keeps them poor. So tpeople are forced to o buy houses and pay CGT. The government can control the house prices making sure they always go up so they always collect, more and more as they get greedier and their is little resistance if people think the tax is intended to reduce wealth gap and don't realise the hazard that it is funnelling money to the government both through the tax and through the money printing.

I feel like this deserves more all caps but I am going to hold back because even though CGT allone it a terrible wrought, it gets worse! Now we have talk in Australia of unrealised capital gains taxes. We are heading further into the dark and I will save that for a future post.

Quantifying the Value of Motherhood

The value of fostering children has been long undervalued in western governments. I attribute this to many factors including short time preference. A child is a long term investment and it take upfront pain and sacrifice. To me it's clear that it is valueble without analysis, but I want to do the math so the math people can understand, it's more than a feeling.

For this we assume that the society has balanced books, that the average person is productive for 50 years and that 30% of their production is surplus to their own requirements for sustenance. You could also construe this 30% as tax intake as it is also about the average tax rate. The added value of the child is represented as that child whole life and it is not just for the parents, or for the family name, but for the whole of society.

Motherhood

Per child calculations.

Average wage x 50 x 30% = Ave.Wage x 15 

We use the average income and not the median income because the child has an even chance of being average. With good parenting, from stay at home parents, you would hope they would be better, but lets ignore that from this calc. In New Zealand the average wage is around $69k and in Australia it is $102k. 

102kAUD x 50 x 0.3 = 1,530kAUD = 1.5 million AUD

For a mother of 3 that is $4.5 million dollars!

The value of children can be projected out far into the future. Those children themselves have children and if they can all do this at higher than replacement rate, eg; having 3 children and whilst still on average maintaining 50 average working years, then the calculation can be projected out. If we project this out over 100 years with average generation interval of 25 years, ie;  the average child is birthed when the mother is 25, then the calculation for a mother of 3 is higher. 3 children, 9 grandchildren, 27 great grandchildren and 81 great great grandchildren.

$1.5 million x (3 + 9 + 27 + 81) = 1.5 million x 120 = $180 million

Wowowoh! Yes! it is so high the power of compounding numbers. If we project it out forever then the value will go to infinity! 

We should note that doing this, providing this value is relies on more than just creating the child, it also requires an intergenerational effort to sustain these conditions. So now we have established the huge potential financial impact, lets bring it back down to earth and attribute the funds directly to how we spend our time.

The stay at home mum.

So if we consider that the years taken off work to raise the children are a valuable part of sustaining the intergenerational conditions. If we say that it takes 5 years per child to bring them up well enough to meet our conditions and that the rest of the upbringing is excluded, because during that time the parent can also be working without compromising the intergenerational culture then here are the calculations.

Per year calculations.

Staying with the 1.5 million per child (life time) number

1.5 million / 5 = $300,000 per year per child

Using the 121 million per child number attributing the value generated for the century. 

121 million / 15 years =  $8,066,000 per year per child

Yes thats crazy, it's disregarding the child raising time of the children. in this we should include the time of the children and grandchildren taken to raise their kids. This will assume that the whole family ends at the end of the century and that all work has been completed. The total years spent in the century raise the children of this averagely productive growing family.

3 x 5 + 9 x 5 + 27 x 5 + 81 x 5 = 120 x 5 = 600 years

$180 million / 600 = $3 million per year

Big Tech AI and Captive Voters

Big tech controls old people and people who are susceptible to their AI and algorithms. They control media and can polarise people first and let them be left and right without need for interference, but when it comes to issue that effect them they can sway both sides to what they need. This gives them a lot of control on the issues that matter to them gaining power. Through this the big tech companies start to control the democracy. The susceptible is the majority of the population.

Then the government enforces policies on behalf of big tech monopolies. I case you need reminding I'm talking about Meta, Alphabet from the USA with insurgence from OpenAI and X and with Tencent, Bytedance from China. The  policies prevent decentralised AI use like self hosting and cpu friendly algorythms, we have seen this already with the response to DeepSeek an open source, cpu friendly self host able model. It's already happening and as the AI gets better and the monopolies get stronger it gets worse. It could be the end of well functioning democracy.

Comprehending Big Numbers

It is easy to loose track of things when the zeros start stacking up. TV presenters and politicians find themselves doing it all to often a million here a billion there "did I say a  billion I meant a trillion". After a while it just starts to sound like "a lot of money", but you can't really feel it, for what it's worth in dollars. 

As a simple human, if you don't really grasp the numbers than you are at a disadvantage and so I did some calculations to make the numbers relatable, For simplicities sake I'll ignore inflation or appreciation and compare these big numbers to $100 a number I think everyone can comprehend. At the moment at least $100 is enough to buy food for a day, to eat out and do normal things that you might want, for one person, maybe even buy something. It supports a lifestyle spending  $36,500 year, which seems decent, excluding rent in most places. $100 lets you live for a day without too many worries.

So lets do the math in our head on the $100 a day standard.

$1,000 = 10 days

Thats not to good!

$100,000 = 1000 days = 3 years

Getting better, starting to feel like the money can provide decent security for one person. For a three person family this is one year. 

$1,000,000 = 10,000 days = 30 years

No we are talking, millionaire status gives us a sense of security if we past half way through an average lifespan, or a sense of freedom if we are in our 20's. You can do what your want and not run out of money for a "long time", it's not a lifetime though, and if you have a family of 5, it's 6 years. With a fully family you might want $6,000,000 to get the same feeling of freedom and security. 

$10,000,000 = 100,000 days = 300 years

With 10 million the family is covered for 60 years. At the moment this is the retirement figure for many people. For one person it is more than enough to have a good life and not run out of money. The 8 figure fantasy.

$100,000,000 = 1,000,000 days = 3000 years

No we are getting incomprehensive. It's ingrokable, actually you could ask Grok, but thats an extra step, at first sight 100 million just seems like a lot of money. 3000 years is just a long time! For a family of 5 it would be it's 600 years, that's generational wealth. You need to be serious about it or you don't need to worry about spending amounts, we can upgade the daily spend of the family to $1,000 and thats 60 years of continuous splashing out for the family.

$1,000,000,000 = 10,000 days = 30,000 years = 600 upgraded family years

Now with 1 billion dollars everyone in the family has generational wealth.

$1,000,000,000,000 = 10,000,000 days = 30,000,000 years = 600,000 upgraded family years

With 1 trillion dollars it's getting crazy, how do we comprehend even spending such money. That will feed Australia for a year. $1000 a day just doesn't cut it either, 600,000 people can splash out every day for a year. We need to upgrade the lifestyle again to put this in perspective for one family, lets first go to a "spend spree" per day calculation at $10,000. Now we have 1 million of them or 60,000 spend spree family years so lets expand the family to 50, we now have 6,000 "extended family" spend spree years. Thats a lot of money! 

Value Transfer to Frugal Hands

With bitcoin wealth is being transferred specifically to savers. This happens because time in the market is the has the biggest impact with exponential returns. Over time your income has less and less impact on how much you can change your bitcoin stack, all that matter is whether you hold onto your bitcoin or not. This is why what might seem like mindless chants of HODL make soo much sense.  

DCA is a great strategy, it moderates the psychological impact of the ups and down, which in turn calms the fear and the ego. It's a great way to get into bitcoin and help bitcoin over time, but it's impact on your stack does reduce over time if your income stays the same in fiat terms. Whats more significant is how you scale your lifestyle in relationship with your new found bitcoin wealth.  If you keep your lifestyle the same, this has a lot of impact allowing you to never sell bitcoin. This 

Not expanding your lifestyle means you never feel the wealth from bitcoin in your physical possessions. and this might be a bit too extreme of frugality for most ( although I do commend these hermits).  You scale your lifestyle at a linear pace lower than 

You can even scale your lifestyle at close to the same pace as bitcoin, exponentially, with bitcoin backed loans. This adds some risk and in the past has lead to loss of bitcoin at organisations such as Celcius and Blockfi, but we may have learnt from the excesses and mistakes of the past and these things seem to be coming back to popularity. Combined with DCA you can reduce risk and bring forward bitcoin returns from your DCA. Jack Mallers explains for his new loan product at Strike, that you can take one years salary out as bitcoin collateralised loan, spend it as you need whilst you continue to work and DCA your whole salary. As long as bitcoin goes up more than the interest charged then you are making a net gain over the year. Given the average return of bitcoin can hold up then the amount that you stack should cover the cost of the loan and then some. when the loan is due to be repaid after one year, you can take out another to cover it with the extra capital that you can gained in the process. This allows for exponential scaling of lifestyle.

Given DCA abilities 

Lifestyle = collateralisable stack x ((average bitcoin return 50%)-(btc collateralised interest rate 14%) x years in the market).

Then ruffly lifestyle compounds rate up to 36% without reducing your stack.

If your more frugal than that then your stack should increase in fiat terms. If your also continuing the DCA then your stack should increase in bitcoin terms.

Of course I wouldn't recommend putting all your stack into this kind of scheme. So your normal stack is more than your collateralisable stack, I would think you might have a ratio of up to 10 to 1. There are risks involved so you minimise them this way and this is not investment advice. Some of these risks come from centralised trust and using only one loan organisation. There are other organisations such as SALT and decentralised loaning systems Debifi and Hodl Hodl Lend. If your getting tired of being a frugal hermit, if your HODL virtue is running dry, they might be worth checking out.

The Hero's Fly Toward the Flame

Popular podcasters have had a good run. The latest OP_RETURN controversy was to juicy to resist. The hits, the downloads, the opportunity to get on the right side of something, the social side. Nver mind that it is a very subtle subject.

I am resisting this, in bitcoin we burn our hero's (or they burn themselves), social controls are diluted through math and privacy and bitcoin doesn't mix well with growing ego's. 

If you are a podcaster (or a blogger) Bitcoin isn't controlled by words, it is controlled by code. If you don't understand the code you have to interpret, and when you interpret you risk projecting yourself onto it and creating confusing hallucinations. For some it is technical, for others it is philosophical, actually it is both, but very subtle. 

If your not contributing to Bitcoin Core then I think that your right to complain is diminished. We need more implementations with more contribution and more users. If you don't like it or think you don't, it's time to get to work. Understand Segwit and Taproot, figure out the difference between node policy and consensus. Let's decentralise the code more, it's a good thing to diversify where the code comes from, it makes bitcoin more resilient. So it's not all bad to have a debate, a so called "war", but whilst I am researching pro's and cons, I'm not signing up to fight. 

Here are some current bitcoin implementations in need of your input.

🔒 Bitcoin Core
• Maintainers: Bitcoin Core developers
• Notes: The reference implementation; conservative and security-focused.

🔧 Bitcoin Knots
• Maintainer: Luke Dashjr
• Notes: A superset of Bitcoin Core with extra features for miners and power users. More experimental and policy-flexible.


🪶 LibreBitcoin
• Maintainer: Community-driven (Librechain project)
• Notes: A drop-in Bitcoin Core fork with hardcoded changes favoring decentralization and transparency (removes assumed trust points).


⚡ btcd
• Language: Go
• Maintainer: btcsuite
• Notes: Full node with a focus on modularity and clean Go code. Used by many in the Lightning ecosystem (e.g., LND).


🦀 Rust Bitcoin / Rust-bitcoind (under development)
• Language: Rust
• Maintainer: rust-bitcoin org
• Notes: Not a full node yet, but increasingly powerful libraries that may form a full implementation in the future.


⚙️ bcoin
• Language: JavaScript/Node.js
• Maintainer: Purse.io
• Notes: Full node and wallet library used for educational and dev-oriented deployments.


🧠 Bitcore
• Language: JavaScript
• Maintainer: BitPay
• Notes: Initially a full node implementation, now mostly focused on wallet infrastructure.

The People Built The Great Pyramids

I find the pyramids fascinating and hypnotic, as I think many people around the world do. It is fun to look at the commonly accepted history and to compare and contrast this with peoples alternate theories. There are so many that i'm not sure the societies consensus still resides with the normal history anymore, at least for the three great pyramids.

One thing that has been found by the science and egyptology community recently was that the masons who built the great pyramids of Giza we not slaves and in fact were some of the best paid and respected people of the city.  https://www.bbc.com/news/world-middle-east-1119792

These findings don't want to believe that the Great Pyramids, the first one of the best quality, were built by slaves. I don't like the idea, given my knowledge of people and economies today it just does not seem realistic. The slaves are not motivated, the army that you need to keep the slaves inline is huge, they have to be paid, they are not actually contributing to the building, you need to do this over generations, someone going to revolt, easily sabotage the project. It is just a huge problem considering where do you get the money and resources from. How you sustain the project to completion after the Pharaoh dies? you need a very intrenched culture to uphold this Pharaoh Hierarchy and we know that maintaining such an order is very difficult. We couldn't build such things now with slaves. We would even struggle if we could find the money to pay people well.

I find it more plausible that they were built by natural agreement of people who had developed an intergenerational low-time preference builder culture. This idea that one unquestionable selfish and self absorbed figure and controlling organisation can cause huge human work efforts. The concept that the team ethic and a long term altruistic perspective are much greater achievers. Examples of cathedrals in recent times compare more favourably to me, where the pyramid projects are considered projects of the society to the benefit many.

Further to this the slave story is a psychological operation designed to trick people into believing that they are better when they are told what to do. It lulls people into accepting slavery and that why the iconography is continued on the the dollar, the sly mechanism they used to bring slavery back. Its a story told by creeps, and whats with the eye?

To continue the metaphor and swap it around with our new money. The bitcoin pyramid, is not evil like the fiat one, it is a beacon signifying the singular powers of decentralised, intergenerational low-time preference builder culture. We might have to build another one to prove it.