Post-Scarcity Monetary Theory (“PSMT”): Rethinking Value, Collateral, and Growth in an Age of Abundance
Abstract
Post-Scarcity Monetary Theory (“PSMT”) proposes a new macroeconomic framework for economies in which technological progress drives the marginal cost of production toward zero. Traditional systems (built upon scarcity, debt, and time preference) fail under these conditions, as interest rates, cash flow, and capital accumulation lose meaning when abundance is the default state. PSMT replaces scarcity-based collateral with truth-based collateral, anchored in energy expenditure, cryptographic verification, and informational integrity. This framework synthesizes insights from Keynesian, Monetarist, and Modern Monetary Theory (“MMT”) traditions, while addressing their limitations in a world defined by artificial intelligence (AI), automation, and decentralized energy. PSMT situates Bitcoin and other proof-based assets as the base layer of a new monetary architecture - one where trust is replaced by verification, and economic growth evolves from production to coordination.
More to Come…..
Additional Insights:
Post-Scarcity Monetary Theory (“PSMT”) introduces a novel synthesis, it draws on a lineage of thinkers who have each examined fragments of the same phenomenon: the convergence of technology, money, and human purpose in an age of accelerating abundance.
1. Technological Deflation and Abundance Economics
The technological foundation of PSMT builds on the work of Jeff Booth (2020), who argues that exponential innovation naturally drives deflation, rendering debt-based monetary systems unstable in the long run. Booth’s thesis (that technology lowers costs faster than central banks can inflate them) establishes the first pillar of PSMT: the inevitable collapse of scarcity as a monetary anchor. Similarly, Peter Diamandis and Steven Kotler (2012) explore how exponential technologies democratize access to energy, information, and materials, describing an “abundant future” in which traditional resource constraints erode. These works articulate the macro-deflationary pressure that PSMT formalizes into a post-scarcity monetary model.
2. Bitcoin, Digital Scarcity, and Truth-Based Collateral
The second pillar of PSMT emerges from monetary theorists and Bitcoin scholars who redefine scarcity through energy and computation. Saifedean Ammous (2018) positions Bitcoin as a return to sound money rooted in physical cost, while Lyn Alden (2023) and Robert Breedlove (2021) frame it as a bridge between thermodynamics and trust. Jason Lowery (2023) extends this into geopolitics, describing Bitcoin’s proof-of-work as a nonviolent power projection mechanism that enforces order through energy expenditure rather than coercion. These ideas prefigure PSMT’s notion of truth-based collateral… value anchored not in promises or debt, but in verifiable physical truth.
Further, Nick Szabo (1997) and Balaji Srinivasan (2023) explore “trust-minimized systems” and “the network state,” anticipating PSMT’s concept of verification supplanting institutional trust. Together, these thinkers establish Bitcoin as the prototype for a monetary system grounded in computation, not decree.
3. AI Economics and the Collapse of Labor Scarcity
Economists such as Erik Brynjolfsson and Andrew McAfee (2014) describe how automation erodes the traditional link between labor, production, and income… a dynamic PSMT extends into macroeconomic collapse. Their “Second Machine Age” framework captures the productivity explosion that undermines the Keynesian balance between employment and demand. As AI systems begin to outproduce human labor at near-zero marginal cost, interest, debt, and cash flow coverage lose meaning… precisely the condition PSMT seeks to formalize.
4. Post-Scarcity Philosophy and Societal Transformation
Philosophers and futurists have long speculated about post-scarcity coordination. Jacque Fresco (2002) envisioned a “resource-based economy” free from monetary mediation, while Yuval Noah Harari (2016) and Nick Bostrom (2014) describe how artificial intelligence and biotechnology may dissolve labor scarcity and redefine purpose. PSMT departs from these visions by retaining a monetary layer… not to allocate scarcity, but to verify truth. It treats Bitcoin’s proof-of-work not as an end-state currency but as a verification protocol that anchors abundance to physics and ethics.
5. Synthesis and Departure
Existing frameworks (Keynesian stimulus, Monetarist policy, and Modern Monetary Theory (MMT)) remain constrained by scarcity assumptions. Even Kelton (2020)’s MMT, while recognizing monetary sovereignty, presupposes finite real resources as the limiting factor for inflation control. PSMT extends beyond these boundaries, proposing that when marginal cost approaches zero, scarcity ceases to constrain growth, and truth becomes the new form of collateral.
In doing so, PSMT unites the deflationary logic of Booth, the thermodynamic integrity of Bitcoin theorists, and the abundance lens of Diamandis into a single macroeconomic framework for the post-scarcity era. It does not reject existing schools… it completes them, describing the next logical phase of economic evolution: the transition from managing scarcity to coordinating abundance through verifiable truth.
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Inflation vs. Deflation: The Monetary Clash That Will Define the Future
Introduction: A System Built on Inflation
For the last half-century, the global financial order has been built on inflation. When the U.S. left the gold standard in 1971, the era of fiat money began in earnest. Central banks gained the ability to create money unanchored from any hard asset, promising stability through careful management. A little inflation, the story went, was a small price to pay for growth.
And for decades, it worked… at least on the surface. Inflation became the lubricant of the system, a quiet tax on savings, and a tool to manage debt. But beneath the surface, it warped incentives, widened inequality, and hollowed out productive growth.
Today, we stand at a crossroads. Inflationary money isn’t just policy - it’s architecture. But that architecture is now colliding with a new, deflationary model born from two unstoppable forces: BTC and artificial intelligence.
The Logic of Inflationary Money
The case for inflation is simple: economies need constant expansion. If money slowly loses value, people are encouraged to spend, invest, and borrow. Governments can service debt more easily, wages can “rise” without much real productivity, and financial markets thrive on cheap credit.
But this logic has consequences. When money is designed to depreciate, savings are punished, speculation rewarded, and debt becomes the economy’s engine. What began as a policy lever turned into permanent monetary dominance.
• Wealth concentration: Asset inflation outpaced wages, rewarding owners and penalizing workers.
• Financialization: Capital flowed into speculation and leverage instead of productive innovation.
• Moral hazard: The expectation of central bank rescue insulated risk-takers and punished savers.
The result? An economy addicted to inflation, where stability depends on debased money.
BTC and AI: A Deflationary Counterforce
BTC represents the opposite architecture: money built on absolute scarcity. With a fixed supply of 21 million, it cannot be inflated away. Its design is a critique of fiat…. a reminder money need not bend to politics.
Layered on top is AI, a force that relentlessly drives costs down and boosts efficiency. Where inflationary money demands rising prices, AI pushes toward deflation. The clash is unavoidable: one system needs price growth to survive, the other thrives on falling costs and abundance.
In a BTC-AI world:
• Savings are rewarded. Holding money is rational, not a losing game.
• Productivity is unleashed. Innovation is valued for real deflationary impact, not credit attraction.
• Trust shifts. Confidence moves from central banks to decentralized, incorruptible systems.
The Collision Course
The inflationary system cannot easily coexist with the deflationary alternative. If BTC and AI gain traction, they expose the fragility of debt-driven economies. Central banks lose their monopoly on monetary trust. Fiscal policy is constrained by hard assets instead of endlessly expanding liabilities.
For governments, this is existential. For individuals, liberating. The clash is not academic - it is the defining macroeconomic tension of the 21st century.
Conclusion: The Coming Realignment
History shows monetary systems don’t collapse quietly; they transition through crises. Inflationary fiat and deflationary BTC are now locked in a struggle to decide finance’s future.
The question is not whether one is “better” in theory, but which aligns with exponential tech, demographics, and sovereign trust.
Inflation built the 20th century. Deflation (powered by BTC and AI) may anchor the 21st.
OTCE
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This is how you transition the system and fix tradfi 👇👇👇👇👇👇
Part 2: Unlocking the Sovereign Flywheel
Stablecoins, Bitcoin Reserves, and BitBonds
The Silent Revolution Reaches Its Fulcrum
History doesn’t bend through war alone. Sometimes it turns through silent revolutions, sometimes through more subversive means. What began in 1913 as a coup to centralize money creation (and what has quietly unraveled through stablecoins and Bitcoin) is now approaching its decisive fulcrum: the sovereign flywheel.
The Preface revealed the coup. Part 1 (Coup to Code - The End Run Around the Fed) mapped the escape hatch: using stablecoins and Treasuries, with Bitcoin as the inflationary release valve. Now, Part 2 shows how these tools combine into a system-level architecture - one that can transform sovereign balance sheets, reduce fragility, and restore fiscal credibility in an age defined by debt, demographics, and artificial intelligence.
At its core, the thesis is simple: a sovereign can neutralize and amortize its debt by rebasing liabilities against a scarce reserve asset and by structuring that asset into its liability’s framework. To achieve this, the state must reactivate its balance sheet by holding Bitcoin as a strategic reserve. If that nation also holds reserve-currency status, it can exploit that credibility to channel global liquidity into a U.S.-aligned digital-asset ecosystem - anchoring the transition to a scarcity-driven monetary paradigm.
The flywheel rests on three components:
1) Stablecoins - the liquidity layer
2) Bitcoin reserves - the neutral anchor
3) BitBonds - the structural innovation
Alone, each is powerful. Together, they form a self-reinforcing loop - an engine that transforms fragile, debt-heavy balance sheets into enduring sovereign strength.
Details in the stubstack, with audio
Make sure you ask Black Rock first! Ha