Ripples in The Fabric

Ripples in The Fabric
Photo by Ryunosuke Kikuno / Unsplash

What in Heavens is this post about? Ripples, Fabric? Have I gone mad? No! This post is about what we can use the previous posts for; with trust what can we achieve? First I'll touch on The Fabric, how the generic market economy is a spiders web of depending and interconnected services, and then I point to what disruptions may lie ahead. Finally I will introduce a train of thought -

Demise of The Market Economy

The global economy is majorically interconnected market economies – and some that aren't but might as well be (China for all, but even places like North Korea is deeply dependant upon the rest of the world) based on money and the supply / demand mantra.

This interconnectedness starts in your living room more or less! It starts with you being interconnected with your partner (perhaps not but then with the guy you've rented the flat of, or the company where you've bought your shiny new 50" LED TV  with only a few euros up front and the rest in 36 easy installments), and it keeps going all the way to the TV factory in South Korea, the cement factory that produced the cement for the concrete poured into the foundation in the basement of the high-rise where you live, the truck drivers that moved your furniture from the old apartment, the baker around the corner, and by now I think you get the picture. What keeps all these tiny wheels in place? Money.

Like the song - money makes the world go around - and it's actually true! Goods change hands and cash the other way. It used to be barter - you'd bring eggs to the market and end up with 2-3 knitted woolen sweaters, that you'd exchange for a goat, and so on. Later you'd carry gold pieces, then silver coins. Not that many years ago most kept a fair pile of bank notes in a secret place. Now you will have a digital wallet with some bizarre labeled crypto currencies. Each money moniker transformation did leave you just a tad more convenient. Barter could be such a hassle when no one would take your latest exchange of your hands (no demand). Gold pieces could be heavy to carry when you would be on a shopping spree perhaps buying a big plot of land or paying off that army of yours. Green backs always presents a threat if you take them to the wrong side of town (a lot of demand and not any consideration for your well-being).

Expansion of The Fabric (the interconnectedness) had two drivers. Money being more and more easy to move - in more technical terms you could say that the cost of transactions has fallen since like forever. Particularly since italian scientists 'invented' modern book-keeping in the era of The Rinascimento the cost has dropped increasingly fast. Why? Because now you did not have to bring "cash" but would just settle in the books and then someone who owed you money in that place or near by would go and settle your "conto" in your place and you'd then tear his IOU to pieces and toss it in the open fireplace (saving you from risking being robbed on the way as one of the costs disappearing). The other driver happened a few hundred years down the road, in Scotland - when Adam Smith described the division of labour / specialisation. Whether industrialisation precursored specialisation or it went vice versa is perhaps of less relevance - increasing wealth gave way to new ideas and methods were tested and they again provided even bigger returns.

I will not pretend to be able to squeeze 4-600 hundred years of economical, sociological, theological, basically human history into a 3 sentence explanation/characterisation, suffice to say we've landed at a level of interconnectedness that obviously is dangerous! One ship making a bad turn hit the global economy by $6 - 10bn a week, and that was just to top off a global market entrenched while spending estimates of $12tn costs fighting a pandemic putting on clear display how fragile and helpless most economies, nations and indeed individuals have become, eg. 50% of households not being able to sustain basic consumption for more than 3 months of unemployment.

Road Bumps Ahead

Everything revolves around money - and that is increasingly less a blessing as automation, digitalisation, and de-globalisation progresses. Pressure on money-markets and currencies, the core building blocks of  market economies. Battling the climate changes, money-laundering and other tax evasions, national strategies to de-globalise with huge implications for the regional specialisations of markets and industries, and the list goes on. This is The Fabric and the many ripples that we can observe here in the middle of the 20's.

Globalisation never was and never will be the answer - as foreseen by the likes of Kenneth Galbraith.

Specialization is not the way forward -

The Puzzle Solved

It's no coincidence that I focused on trust in the first post of this series! Would you trade with someone you did not trust? Would you pay them? Take their money?


Like we established, trust is the corner stone to solving the puzzle! Once that one is in the books we can take on bigger bites. The first and equally important stone is direct democracy like they are used to in Schweiz. Current polarisations and rigging of elections with losers trying to overturn results has to end or we all risk being sent back to the stone age, literally (most experts concur that a nuclear war will end modern civilisation as we know it – not because of radiation necesssarily but famine and no clean drinking water). Direct democracy is not a viable solution bar the smallest local communities, because of the costs of setting up polls. It so happens that our Pigeon tokens trust model will allow us voting every minute of the day almost for free!


I'll wage a decent sized cold beer you didn't see this heading coming 😅

Paying for someone elses ill fortune is labeled insurance in some markets (like USA) and socialism elsewhere (Scandinavia).

If we could all vote on every claim - and all be granted access to considering the circumstances to the claim - would we vote fair? I am 100% undecided, maybe maybe not. It's a fair argument that those of limited means will have a hard time convincing those well off. On the other hand - insurance industry is doing pretty darn good, with returns on equity ranging from 12 to 50%, and mind you, in an industry with a global equity mass of US$ 35+ trillion. Big capital gains - in Denmark alone insurance companies raking in some US$ 2bn in fiscal 2021. Adding the substantial costs running insurance companies (some of the most digitalized and efficient companies operate at 14%) - again in Denmark, will add in excess of US$ 5bn.

Savings & Loan

Like the next section on payments it is a walled garden guarded heavily by a select few organisations desperately trying to fend off any disruptions, and with good reason! Banks are a US$ 6bn profit business – in Denmark.

If we add the previous 7bn we are at 13bn - which arguably is a fair bit more than change


An entire industry (banking) is doing tremendously well handling something so mundane and, with the current technological advance, simple as - payments. One shop owner described it like this:

Banks used to handle (and pay for out of their profits) money and we [shops] could focus on trading goods. Now we pay for everything!

This remark was made pertaining to the (increase in) surcharges payable by merchants accepting credit card payments. The costs of spending/accepting money are - contrary to what one might expect with economies of scale and the advances in technology – going up and shops now face a surcharge in the range from 1 - 6% depending upon the credit card in question, and choice of payment processor.

Could we do better? Heck yeah!

With the obiquitous smartphone and it's NFC (near-field-communication) a modestly complicated app could provide the interface and a simple request could shovel funds from your account to that of the shop keeper. Important to notice – this is how it is done today, for all in Denmark, but with the "added help" of several parties sucking that tit! The basic transaction is

  1. verify that buyer's account is valid and has funds
  2. verify that seller's account is valid and may accept funds
  3. move funds from the buyer to the seller

Whatever is wrapped around this simple 1 computer operation is value adding – at the expense of the users!

Peering down the nuclear catastophe abyss I posit this is indeed national critical infrastructure not far from energy distribution, and miles ahead of current national hallmarks like museums, (rail)roads, schools, hospitals, more.

You may ask: but 1-6% isn't going to rock any boat now is it? Well, that depends upon your definition of boat, and rock! The EU reported on non-cash payments in 2023 being at EUR 111+ trillion - even 1% would slice a decent trillion (that is a million millions) euro off of consumers and businesses budgets! The basic "service" – moving money from one account into another - could be handled easily by 1 computer/million users which translates into some 600 in the entire EU and keeping them afoot would not set back the ECB more than 1/100* of its 2023 operational costs which were EUR 1,200+ million.

Real estate

The final brick - pun intended - to the puzzle comes with a disruption of real estate, and not just real estate as in land, brick and mortar but consumer durables like cars, boats, houses, dish-washers, more.

With the current consumption scheme that does not compute at all provided the climate issues facing all of us, we have to build better/longer lasting durables and develop a more fine-grained logistics system for redeployment of used goods.

Connecting every durable to the aforementioned pigeon tokens network will allow any buyer to perusing the event logs of any durable and - perhaps with the help of professionals - gauge a fair price. Event logs could be attached to subscription models and provide governments with models for taxing less performing durables. The possibilities are endless –  

To sum it up a recent study shows that the finance sector sits uncontested in the top when considering 128 industries/sectors when comparing the wage premium/rent sharing which is an indicator of less than optimal competition and market inequalities.

*) establishing and programming this pigeon token network would require some funds but sidestepping the urge to complicate and - cut to the chase - so to speak building a v1.0 of the pigeon token network would ask for less than EUR 5 million. Propagating it across the EU zone would be effortless with the primary "sellers" being shop keepers promoting this 'cheap' system to consumers and perhaps offering rebates when utilised.

At 10-15 locations across EU with compute costs ranging from 3 - 50 EUR/month a 600 computers strong system (4-6 in each location – with perhaps 3-5 main locations and 5-10 secondaries for spikes and failover) would accrue less than EUR 50,000/month whereas  operational staff and engineers when out-sourced might cost EUR 100,000/month – a total of some EUR 2 million/year. Add another EUR 2 million/year for separation of trafic, and allow management and further "complications" vis-a-vis standard EU bureaucracy and other leeches meddling with a resulting 3x factor will bring the costs to some EUR 12 million/year.