Today I made a trillion dollars. Not bad for an investment of about $200. But I own 1 trillion of the clem token and it has a value of 1 USDc token, which is worth $1. QED I am a trillionaire.
I haven’t sold any of my trillion clem tokens so I have no tax to pay, so I will sit with my huge wealth and luxuriate.
Now this “fact” sparks several thoughts and I’ll deal with the first because it’s not where I am going with this article.
Liquidity remains a key variable in valuation and remains unfactored in the value of so many instruments, including the clem token, that it is painful. I can sell 10 clem tokens and retain my trillionaire status, but probably not $100 worth, unless I get my wife to make the purchase. Sell $1,000 worth to the world and my $1 trillion market-cap will be atomized. Many a rich man has been reduced to pauper-hood overnight by a lack of liquidity in their assets. Many a valuable asset has vapourized when the owner was forced to sell in a firesale.
The crash of 2007 and 2020 were both events driven by a sudden disappearance of liquidity and the roads out of those crashes were both driven by the artificial provision of liquidity by the main creator of liquidity itself, government and its central bank authorities. Sadly the Federal Reserve is not going to buy my clem token even with a significant haircut, which is a pity because I promise to spend those swapped dollars in an orgy of spending that will give them all the inflation they want.
I’m generous enough to make this offer to all central banks with a need for inflation in their economies. If they provide liquidity to the clem token, I will spend like a navy of sailors where and on whatever they like. I’ll pay through the nose for all sorts of things: real estate, collectibles, stocks (gimme some of those Teslas), I’ll even buy their negative interest rate bonds. Oh wait, folks are doing this already with their token currency, it’s not clem tokens, it’s junky, sorry no my mistake, investment grade corporate bonds etc. However, as the economists tell me deflation is going to be a big problem, maybe the professionals need to look wider and start providing liquidity for my clem token. I’ve $1 trillion of it and I’m sure they understand that just like them I can whip up even more of it for them to monetize if they want me to. CQE (Clem Quantitative Easing), it has a certain ring to me.
So how did I become a trillionaire?
It happened like this: I popped on over to Vitalik Butterin’s crypto money printing press, generally known as the blockchain Ethereum. I zigged and I zagged, in a technical way with a smart contract, fed the Ethereum miners about $100 and voila I issued myself a trillion clem tokens. Now I know the thrill that only bureaucrats and politicians feel when they create confetti money out of thin air. Brrrrrr it is definitely a buzz. The truth be told I went to a website that does the complex techie stuff for me, clicked a couple of buttons and whoosh there was my one trillion clem tokens in my Ethereum wallet, but the buzz of Brrrrr was real.
At this point I was not a trillionaire, for that I need Uniswap, the decentralized exchange. There is no SEC to get in the way of listing the clem token, no MiFid, no mandatory advisors to assure me $1,000 for a letter is the going rate for advice and that $100,000 is bottom dollar for any sort of listing paperwork. So off I go to Uniswap, create a new trading pair. Click, click, click, mumble, swear, click and voila you can now buy clem coin for the $1 stablecoin from Coinbase, USDc. 1 USDc ($1 in value) gets you 1 clem token. Click, click, done. That’s the market price of the clem coin and that’s where the price is staying. Meanwhile as I have 1 trillion of them, which makes me a trillionaire. (My bosses at Forbes need to list me at the top of their rich list immediately, LOL.)
So what? A king for a day.
Being a paper tiger trillionaire is not the point, what I actually did was tokenize myself. You can now buy stuff from me in my own money and if I were to honor my clem token fully, you are actually buying a bit of me. That sounds kind of scary, but it is not.
Want to buy my opinion on a share? (This is an example, not a current product.) Pay me 100 clem tokens. I’ll get $100 of stablecoin.
Why not get paid in USD via PayPal? Why not indeed, but there are a lot of use cases where this makes sense, including not getting mangled up in current systems or being frozen out by lack of access to them.
But this begs the question of why do countries have their own currencies and sorely miss them when they give them up, for example, for the euro. The answer is in the word, currency. If you have currency, in the old fashioned meaning of it, which is relevance, integrity and intrinsic value, your actual currency also has value. According to NMT (new monetary theory) an entity with its own accepted currency, a currency with currency, simply can’t go bust, it can only debase its currency and hence dilute its debt until it reaches an equilibrium point. The history of money is littered with such outcomes.
In this way of thinking the stock of a company is a currency and as proof enough some companies are ‘ctrl P-ing’ that right now.
Consequently all I need to do now is create value behind the clem token and I become some kind of sovereign, sadly not the gold type, and of course the next trick is, how?
This is not as ludicrous a mission as it may seem, because right now projects can do the very same thing and fund themselves by distributing coins via this mechanism and one day turn those tokens into governance tokens that will seamlessly and silently pay their owners from proceeds of the token’s system.
Sadly the clem token will never directly govern my behavior, but you never know I might send you an unique selfie for a mere 100 clem (item out of stock) and that in a way will be nearly the same thing.
I hope you found this read amusing but don’t be misled, this whole process of permissionless listing with market cap fixing is going to be big, exciting, incredibly risky and have oases of opportunities to make a lot of money, some of them will even be honest and legal.
Chambers won Journalist of the Year in the Business Market Commentary category in the State Street U.K. Institutional Press Awards in 2018.