Anti-Inflationary


 

The Earth Dollar will have a built-in anti-inflationary mechanism
controlled by Artificial Intelligence and will be pegged to
increasing buying power as part of the Living Economy. The
alternative Living Economy is not debt-based but based on
the health and wellness of Mother Earth (Natural Capital Assets).

7

 

Anti-Inflationary


 

The Earth Dollar will have a built-in anti-inflationary mechanism controlled by Artificial Intelligence and will be pegged to increasing buying power as part of the Living Economy. The alternative Living Economy is not debt-based but based on the health and wellness of Mother Earth (Natural Capital Assets).

7

THE EARTH DOLLAR’S ANTI-INFLATIONARY MECHANISM

 

 

 

Traditionally a long-held position in gold and silver has been a preferred hedge against inflation. Now Bitcoin and cryptocurrencies have emerged as a new way of hedging against inflation.

However, the Earth Dollar combines the dual aspect of precious metal assets, and cryptocurrencies, along with an algorithmic anti-inflationary mechanism to hedge against inflation; holders get the best of both worlds. 

The assets backing the Earth Dollar give our currency a stable floor value but has no ceiling value; theoretically, since each Earth Dollar is backed by at least $30 USD of physical assets, it is expected to never go below the floor value of $30 USD in precious metals (and physical assets) backing the Earth Dollar.

The Earth Dollar will be linked to closed-loop exchanges with a built-in anti-inflationary balancing mechanism, which is controlled by Artificial Intelligence. This anti-inflationary mechanism is linked to automated dynamic asset reserves, dynamic currency reserves, and bonding curves. This enables the Earth Dollar currency to be pegged to an increasing consumer purchasing power (as defined by the Consumer Price Index) when it hits the relative highest exchange value, above the U.S. rate of inflation.

The Earth Dollar has stablecoin-like properties but is not a stablecoin; it is classified as a private community currency. The Earth Dollar is designed to grow in value every year ahead of inflation. The value of the Earth Dollar has a floor value, but no ceiling value, in the shape of the curve. The anti-inflationary value of the Earth Dollar is supported by the following mechanisms:

a) Each Earth Dollar will be backed by $30 of Initial Assets with intrinsic value and we will be adding more asset-backing in the future.

b) The price of the Earth Dollar will be protected by a bonding curve, which is the idea that when a person purchases an asset that is available in a limited quantity (like the Earth Dollar), then each subsequent buyer will have to pay slightly more for it. The Earth Dollar bonding curve is created by token issuance smart contracts that create a market for the tokens that are independent of cryptocurrency exchanges. 

c) The anti-inflationary value of the Earth Dollar will be controlled by Artificial Intelligence, with a transparent public mathematical model connected to a bonding curve, an asset reserve, and a diversified currency reserve.

d) The Earth Dollar is designed to grow in a fairly predictable floor value to beat inflation, with no ceiling value.

e) The Earth Dollar is designed never to fall below the minimum floor value by mimicking nature and following natural law. The formula for the floor value of the Earth Dollar is based on Natural Log (aka God’s Formula).

Note: the Earth Dollar Ecosystem has its own stablecoin called EarthUSD which is pegged to the USD; this will allow easy exchangeability between the Earth Dollar and EarthUSD. Stablecoins such as Tether, DAI, and USD Coin can vary greatly in legal, technical, functional, and economic terms. 

THE EARTH DOLLAR’S ANTI-INFLATIONARY MECHANISM

 

 

 

Traditionally a long-held position in gold and silver has been a preferred hedge against inflation. Now Bitcoin and cryptocurrencies have emerged as a new way of hedging against inflation.

However, the Earth Dollar combines the dual aspect of precious metal assets, and cryptocurrencies, along with an algorithmic anti-inflationary mechanism to hedge against inflation; holders get the best of both worlds. 

The assets backing the Earth Dollar give our currency a stable floor value but has no ceiling value; theoretically, since each Earth Dollar is backed by at least $30 USD of physical assets, it is expected to never go below the floor value of $30 USD in precious metals (and physical assets) backing the Earth Dollar.

The Earth Dollar will be linked to closed-loop exchanges with a built-in anti-inflationary balancing mechanism, which is controlled by Artificial Intelligence. This anti-inflationary mechanism is linked to automated dynamic asset reserves, dynamic currency reserves, and bonding curves. This enables the Earth Dollar currency to be pegged to an increasing consumer purchasing power (as defined by the Consumer Price Index) when it hits the relative highest exchange value, above the U.S. rate of inflation.

The Earth Dollar has stablecoin-like properties but is not a stablecoin; it is classified as a private community currency. The Earth Dollar is designed to grow in value every year ahead of inflation. The value of the Earth Dollar has a floor value, but no ceiling value, in the shape of the curve. The anti-inflationary value of the Earth Dollar is supported by the following mechanisms:

a) Each Earth Dollar will be backed by $30 of Initial Assets with intrinsic value and we will be adding more asset-backing in the future.

b) The price of the Earth Dollar will be protected by a bonding curve, which is the idea that when a person purchases an asset that is available in a limited quantity (like the Earth Dollar), then each subsequent buyer will have to pay slightly more for it. The Earth Dollar bonding curve is created by token issuance smart contracts that create a market for the tokens that are independent of cryptocurrency exchanges. 

c) The anti-inflationary value of the Earth Dollar will be controlled by Artificial Intelligence, with a transparent public mathematical model connected to a bonding curve, an asset reserve, and a diversified currency reserve.

d) The Earth Dollar is designed to grow in a fairly predictable floor value to beat inflation, with no ceiling value.

e) The Earth Dollar is designed never to fall below the minimum floor value by mimicking nature and following natural law. The formula for the floor value of the Earth Dollar is based on Natural Log (aka God’s Formula).

Note: the Earth Dollar Ecosystem has its own stablecoin called EarthUSD which is pegged to the USD; this will allow easy exchangeability between the Earth Dollar and EarthUSD. Stablecoins such as Tether, DAI, and USD Coin can vary greatly in legal, technical, functional, and economic terms. 

THE GOLD STANDARD: WHEN US MONEY MEANT SOMETHING REAL

 

Before we explain to you the importance of the built-anti-inflationary mechanisms of the Earth Dollar, you must first understand the history of money and the causes of inflation.

Before Richard Nixon removed the US Money from the Gold Standard on August 15, 1971, you can actually convert your USD to physical gold (1/35 oz of pure gold).

Specifically, the “gold standard” stated that the value of one dollar was 1/35 of the value of an ounce of gold. With the U.S. holding most of the world’s known gold reserves, the system provided temporary stability. Continually adjusting the supply of U.S. currency to match changes in the supply

or value of gold, as the Bretton Woods agreement required made the USD scarce, just like Bitcoin and the Earth Dollar.As World War II wound down and its massive economic impact became clear, leaders from over 40 countries met in New Hampshire to hammer out a plan to prevent a global financial collapse.

 

 
 
Under the resulting Bretton Woods system (named for the site of the summit), the countries fixed their currencies to the U.S. dollar, which in turn was fixed to the price of gold.

If the currency of the world’s largest economy no longer has a set value in relation to a commodity universally viewed as precious and allowed to print how much money they wanted, what is it actually worth?

THE GOLD STANDARD: WHEN US MONEY MEANT SOMETHING REAL

 

Before we explain to you the importance of the built-anti-inflationary mechanisms of the Earth Dollar, you must first understand the history of money and the causes of inflation.

Before Richard Nixon removed the US Money from the Gold Standard on August 15, 1971, you can actually convert your USD to physical gold (1/35 oz of pure gold).

Specifically, the “gold standard” stated that the value of one dollar was 1/35 of the value of an ounce of gold. With the U.S. holding most of the world’s known gold reserves, the system provided temporary stability. Continually adjusting the supply of U.S. currency to match changes in the supply

or value of gold, as the Bretton Woods agreement required made the USD scarce, just like Bitcoin and the Earth Dollar. As World War II wound down and its massive economic impact became clear, leaders from over 40 countries met in New Hampshire to hammer out a plan to prevent a global financial collapse.

Under the resulting Bretton Woods system (named for the site of the summit), the countries fixed their currencies to the U.S. dollar, which in turn was fixed to the price of gold.

If the currency of the world’s largest economy no longer has a set value in relation to a commodity universally viewed as precious and allowed to print how much money they wanted, what is it actually worth?

THE RISE OF FIAT CURRENCIES: PRINTING MONEY WITHOUT ASSET BACKING 

 

 

 

 

 

 

 

The removal of the US Dollar by Richard Nixon in 1971, created money with no commodity and no asset backing. Fiat money was born.

Fiat money is basically money by decree. In essence, the modern U.S. dollar is a dollar because the federal government says it is a dollar. If people lose faith in the fiat currency it is not worth the paper it is printed on.

The value of fiat money is wholly determined by the balance (or imbalance) of supply and demand. U.S. dollars. It will have value only so long as Americans, foreign governments, and international banks all recognize them as valuable and thus desire more of them.

Fortunately, with or without a gold standard, the U.S. dollar remains a preeminent global reserve currency, meaning that many countries keep a substantial portion of their monetary reserves in dollars. Among many, many complex factors, the sheer size of the American economy is considered a reasonable guarantee of the USD currency’s enduring value.

Herein lies a huge advantage that the U.S. has over nations with smaller economies, and a key to the prevalence of hyperinflation among struggling countries. 

For a country whose currency does not serve as a global reserve, expanding the money supply swiftly lowers the currency’s value, because supply massively outpaces global demand. As the money loses value, domestic prices must climb to compensate; a vicious cycle rapidly emerges.

In the end, the success of any decree (monetary or otherwise) depends on the power of the one issuing the fiat. Even in these shaky times, America’s economic power remains vast. Yet does this mean that the U.S. can just churn out new bills by the trillions without consequence?

No. No matter how great the demand, if the supply exceeds it, devaluation and inflation will result.

With the introduction of the world’s largest carbon-negative asset-backed Earth Dollar Community Currency into the global economy, it will help generate massive amounts of new wealth that never existed before and reinvigorate the global economy.

THE RISE OF FIAT CURRENCIES: PRINTING MONEY WITHOUT ASSET BACKING 

 

 

The removal of the US Dollar by Richard Nixon in 1971, created money with no commodity and no asset backing. Fiat money was born.

Fiat money is basically money by decree. In essence, the modern U.S. dollar is a dollar because the federal government says it is a dollar. If people lose faith in the fiat currency it is not worth the paper it is printed on.

The value of fiat money is wholly determined by the balance (or imbalance) of supply and demand. U.S. dollars. It will have value only so long as Americans, foreign governments, and international banks all recognize them as valuable and thus desire more of them.

Fortunately, with or without a gold standard, the U.S. dollar remains a preeminent global reserve currency, meaning that many countries keep a substantial portion of their monetary reserves in dollars. Among many, many complex factors, the sheer size of the American economy is considered a reasonable guarantee of the USD currency’s enduring value.

Herein lies a huge advantage that the U.S. has over nations with smaller economies, and a key to the prevalence of hyperinflation among struggling countries. 

For a country whose currency does not serve as a global reserve, expanding the money supply swiftly lowers the currency’s value, because supply massively outpaces global demand. As the money loses value, domestic prices must climb to compensate; a vicious cycle rapidly emerges.

In the end, the success of any decree (monetary or otherwise) depends on the power of the one issuing the fiat. Even in these shaky times, America’s economic power remains vast. Yet does this mean that the U.S. can just churn out new bills by the trillions without consequence?

No. No matter how great the demand, if the supply exceeds it, devaluation and inflation will result.

With the introduction of the world’s largest carbon-negative asset-backed Earth Dollar Community Currency into the global economy, it will help generate massive amounts of new wealth that never existed before and reinvigorate the global economy.

INFLATION AND PURCHASING POWER

 

The rate of inflation is different in every country; however, we will focus on the US inflation rate. Inflation in the USA is when the prices of goods and services rise in relation to the US dollar (“USD”). The result of inflation is that the USD will buy less of just about everything than it previously did.

For people on fixed incomes or those who are in professions where wages don’t rise along with price increases, inflation can be painful. And if inflation becomes hyperinflation – when prices increase by 50% or more in a year – it can destabilize an economy. Inflation is also difficult when it occurs during a recession, a phenomenon known as stagflation.

Building an anti-inflationary mechanism controlled by AI into the Earth Dollar will theoretically allow the Earth Dollar to maintain its purchasing power over time and allow it to stay above the U.S. inflation rate.

This simply means if you can purchase a hamburger in the USA for $1 Earth Dollar now, then in 10 years, you should still be able to buy one hamburger or more with $1 Earth Dollar.

The chart below explains how purchasing power diminishes over time due to inflation. You have to spend more and more money to buy goods and services over time. In 1913, with $1 USD, you can purchase 30 Hershey chocolate bars, while in 2020, with $1 USD, you can only purchase 1 cup of McDonald’s Coffee.

INFLATION AND PURCHASING POWER

The rate of inflation is different in every country; however, we will focus on the US inflation rate. Inflation in the USA is when the prices of goods and services rise in relation to the US dollar (“USD”). The result of inflation is that the USD will buy less of just about everything than it previously did.

For people on fixed incomes or those who are in professions where wages don’t rise along with price increases, inflation can be painful. And if inflation becomes hyperinflation – when prices increase by 50% or more in a year – it can destabilize an economy. Inflation is also difficult when it occurs during a recession, a phenomenon known as stagflation.

Building an anti-inflationary mechanism controlled by AI into the Earth Dollar will theoretically allow the Earth Dollar to maintain its purchasing power over time and allow it to stay above the U.S. inflation rate.

This simply means if you can purchase a hamburger in the USA for $1 Earth Dollar now, then in 10 years, you should still be able to buy one hamburger or more with $1 Earth Dollar.

The chart below explains how purchasing power diminishes over time due to inflation. You have to spend more and more money to buy goods and services over time. In 1913, with $1 USD, you can purchase 30 Hershey chocolate bars, while in 2020, with $1 USD, you can only purchase 1 cup of McDonald’s Coffee.

WHAT CAUSES ECONOMIC INFLATION?

 

 

 

Here are some of the 7 major causes of inflation:

 

1. The Economy is Going Strong
When the economy is growing, more people have jobs, wages rise to hire and keep those workers, and more people have money to spend. As a result, they buy more necessities, and some even splurge on new luxury items.

In this environment, businesses can increase their prices, and consequently, wholesalers can increase prices. The net result of this cycle of expansion is higher prices.

This scenario is why inflation isn’t always bad news. The Federal Reserve aims for a target annual inflation rate of around 2% because it indicates a growing economy. This kind of inflation is sometimes called “demand-pull inflation,” because it is driven by consumer demand.

Deflation–when the prices of goods fall for some time–can also be considered unhealthy because it can mean demand among consumers is weak.

2. There is More Currency Available
Inflation can also occur when the Fed, or another central bank, adds fiat currency into circulation at a rate that exceeds that of the economy’s growth rate. That creates a situation in which more dollars are bidding on fewer goods and services. The result is that goods and services cost more.

One reason that inflation has been a constant in the US since 1933 is that the Fed has continually increased the money supply. In response to the 2008 financial crisis, the Fed dropped its lending rate close to zero as a way to inject more liquidity into the economy, which led to increased inflation but not hyperinflation. While those increases have usually moved in step with growth, that hasn’t always been the case.

In response to the Covid-19 pandemic and subsequent lockdowns, the Fed released the equivalent of $3.8 trillion in new liquidity in 2020. That amount was equal to roughly 20% of the dollars previously in circulation. And it is one reason why many investors were watching the Consumer Price Index closely in 2021.

Injecting more liquidity with the Earth Dollar into the global economy does not cause consumer inflation because it is not linked to any national governments’ debts.

3. Basic Materials Increase in Price
In the 1970s in the US, and during the Russian/Ukraine war in 2022, inflation is rampant. There were many reasons for this, but one major one was the OPEC oil embargoes and Russian oil blockades. The embargoes and blockades lead to a gas shortage, higher prices for home heating oil, higher prices at the pump, and increases in the prices of manufacturing and shipping for nearly every single consumer good.

Between 1973 and 1974, inflation-adjusted oil prices jumped from $25.97 per barrel to $46.35. And as a result, inflation topped 11% that year.

Another one of the most dramatic periods of inflation was the period 1979-1981 when inflation topped 10% for three straight years. Again, oil was a major contributing factor, as the Iranian Revolution set off further increases in the price of oil.

4. The Housing Market Takes Off
The housing market is a major part of the U.S. economy. And it has an outsized impact on the broader economy. When the housing market is strong and home prices are rising, then homeowners have more equity to call upon to make major purchases, which can goose inflation.

At the same time, a strong housing market means that homeowners, contractors, and builders are spending more on home improvements and buying the raw materials that make those new and improved homes possible. That, in turn, drives up the prices of those raw materials, such as steel, lumber, and oil, which can lead to more inflation.

5. The Government Implements Expansionary Fiscal Policies
The federal government will occasionally try to jumpstart economic growth with new policies. These expansionary fiscal policies often seek to increase the amount of discretionary income that businesses and consumers have to spend.

Often, these policies take the form of reduced taxes with the belief that businesses will spend it on employee compensation and new hiring. That will allow more consumers to spend on goods and services.

Other times, those policies consist of massive infrastructure projects, which can increase the demand for goods and services. The increase of overall liquidity due to central bank monetary policy is also considered an expansionary policy.

6. New Regulations Increase Costs
While a shortage of an essential commodity, like oil, can cause inflation, so can an increase in costs related to a commodity suddenly becoming more expensive because of government regulations.

Sometimes new tariffs can increase the costs of imported goods, which can lead to inflation. At the same time, new regulations that make a particular commodity or service more expensive or time-consuming to obtain can also increase the costs to consumers, leading to inflation

7. The Exchange Rate Changes
The value of the U.S. dollar concerning all other foreign currencies is constantly in flux. If the dollar goes down, then imported commodities and consumer goods get more expensive. But it also makes goods exported from the U.S. cheaper abroad, which can be a boost for the economy.

WHAT CAUSES ECONOMIC INFLATION?

 

Here are some of the 7 major causes of inflation:

1. The Economy is Going Strong
When the economy is growing, more people have jobs, wages rise to hire and keep those workers, and more people have money to spend. As a result, they buy more necessities, and some even splurge on new luxury items.

In this environment, businesses can increase their prices, and consequently, wholesalers can increase prices. The net result of this cycle of expansion is higher prices.

This scenario is why inflation isn’t always bad news. The Federal Reserve aims for a target annual inflation rate of around 2% because it indicates a growing economy. This kind of inflation is sometimes called “demand-pull inflation,” because it is driven by consumer demand.

Deflation–when the prices of goods fall for some time–can also be considered unhealthy because it can mean demand among consumers is weak.

2. There is More Currency Available
Inflation can also occur when the Fed, or another central bank, adds fiat currency into circulation at a rate that exceeds that of the economy’s growth rate. That creates a situation in which more dollars are bidding on fewer goods and services. The result is that goods and services cost more.

One reason that inflation has been a constant in the US since 1933 is that the Fed has continually increased the money supply. In response to the 2008 financial crisis, the Fed dropped its lending rate close to zero as a way to inject more liquidity into the economy, which led to increased inflation but not hyperinflation. While those increases have usually moved in step with growth, that hasn’t always been the case.

In response to the Covid-19 pandemic and subsequent lockdowns, the Fed released the equivalent of $3.8 trillion in new liquidity in 2020. That amount was equal to roughly 20% of the dollars previously in circulation. And it is one reason why many investors were watching the Consumer Price Index closely in 2021.

Injecting more liquidity with the Earth Dollar into the global economy does not cause consumer inflation because it is not linked to any national governments’ debts.

3. Basic Materials Increase in Price
In the 1970s in the US, and during the Russian/Ukraine war in 2022, inflation is rampant. There were many reasons for this, but one major one was the OPEC oil embargoes and Russian oil blockades. The embargoes and blockades lead to a gas shortage, higher prices for home heating oil, higher prices at the pump, and increases in the prices of manufacturing and shipping for nearly every single consumer good.

Between 1973 and 1974, inflation-adjusted oil prices jumped from $25.97 per barrel to $46.35. And as a result, inflation topped 11% that year.

Another one of the most dramatic periods of inflation was the period 1979-1981 when inflation topped 10% for three straight years. Again, oil was a major contributing factor, as the Iranian Revolution set off further increases in the price of oil.

4. The Housing Market Takes Off
The housing market is a major part of the U.S. economy. And it has an outsized impact on the broader economy. When the housing market is strong and home prices are rising, then homeowners have more equity to call upon to make major purchases, which can goose inflation.

At the same time, a strong housing market means that homeowners, contractors, and builders are spending more on home improvements and buying the raw materials that make those new and improved homes possible. That, in turn, drives up the prices of those raw materials, such as steel, lumber, and oil, which can lead to more inflation.

5. The Government Implements Expansionary Fiscal Policies
The federal government will occasionally try to jumpstart economic growth with new policies. These expansionary fiscal policies often seek to increase the amount of discretionary income that businesses and consumers have to spend.

Often, these policies take the form of reduced taxes with the belief that businesses will spend it on employee compensation and new hiring. That will allow more consumers to spend on goods and services.

Other times, those policies consist of massive infrastructure projects, which can increase the demand for goods and services. The increase of overall liquidity due to central bank monetary policy is also considered an expansionary policy.

6. New Regulations Increase Costs
While a shortage of an essential commodity, like oil, can cause inflation, so can an increase in costs related to a commodity suddenly becoming more expensive because of government regulations.

Sometimes new tariffs can increase the costs of imported goods, which can lead to inflation. At the same time, new regulations that make a particular commodity or service more expensive or time-consuming to obtain can also increase the costs to consumers, leading to inflation

7. The Exchange Rate Changes
The value of the U.S. dollar concerning all other foreign currencies is constantly in flux. If the dollar goes down, then imported commodities and consumer goods get more expensive. But it also makes goods exported from the U.S. cheaper abroad, which can be a boost for the economy.