In praise of crypto markets
We don’t really even pretend to understand the crypto markets. Apparently something called the Luna/Terra stablecoin has gone kablooie. As far as we do understand it if the Terra became worth anything less than $1 USD then Luna’s were issued to the value of $1 USD which could then be swapped for a Terra. We’re really not sure if we’ve got that right but given that Luna is now worth $0 USD this would require eiether an infinite issuance or an infinite number to swap for a Terra at which point we think we’ll go for a quiet lie down.
Except for the part where we praise this system. Not the specific Luna/Terra arrangement, but the system of free markets that allows the experiment. What it is possible to do changes as technology advances, what people desire to have done changes with taste, fashion and quite possibly the direction of the wind.
It is precisely free markets - those with open entry access - which allow the experimentation to see which of those things can be newly done meet some human desire or need. Terra/Luna seem to have shown that they don’t and all in under three years from launch. Which we think is a pretty good result actually - doesn’t work, it’s gone, Kablooie and Huzzah.
We would contrast this with government planning things. The law which prevents people building houses people would like to live in, where those people would like to live - The Town and Country Planning Act - was passed in 1947. As we’ve noted before we think that should also disappear, be blown up, proper Kablooie. But no such luck as yet.
It is entirely true that tens of thousands will have been financially damaged in that Terra/Luna adventure. Quite possibly fiscally ruined some goodly portion of them. And yet that free market both allowed the experiment and also closed it down when failure was obvious. The Town and Country Planning Act is screwing up the housing market of an entire country and has been for over 70 years.
If only government was as vicious in killing the errors as those free markets are…..