PCTOM

<theory> Assets need protection Protection must be paid in money Money is created by debt Debt is a claim on an asset </theory>

<application> De-dollarization does not necessarily mean a weak dollar. Weaker hands seeking new Protectors still need to close out dollar denominated debts. </application>

<application> Flight to safety is not a metaphor. Safety is provided by Protectors with Protective Capacity. $USD proliferation = dollar denominated debt proliferation = US claims on assets Collateralizing assets for $USD buys protection. Money doesn’t die when it’s…

<application> The crypto collateral paradox. If the asset is robustly decentralized, it has high utility as a store of value, and it does not need protection. Its bearer needs protection. It cannot seized or rehypothecated. If the asset is not robustly decentralized, it has…

<theory> Money buys protection. Money and the financial system is a mechanism for coordinating protection for assets. While money serves many other purposes in a developed economy, and the protection it buys is abstracted, its purpose and its value is derived from the…

<application> Stablecoin proliferation cannot stave off de-dollarization. It can accelerate it. De-dollarization is the direct consequence of a decrease in relative Protective Capacity. Collateral is pledged to the strongest Protector. The Protector records this collateral…

<theory> The value of money is its Protective Capacity. Protective Capacity is Productive Capacity plus Destructive Capacity. Cₚ = Σᵢ Eᵢ × T_prod,i × (1-Xᵢ) + Σᵢ Eᵢ × T_dest,i × Xᵢ Where: Cₚ = Protective Capacity Eᵢ = Primary energy from source type i T_prod,i =…