The Bitcoin Layer Inside McKinsey’s Global Wealth Report: What It Means for Bitcoin
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Nov 13, 2025 Nik and Demian dive into the intriguing link between credit creation and productivity. They discuss how new money can lead to inflation unless productivity grows to balance it. The duo clarifies the distinction between paper wealth and real wealth, exploring inefficiencies in capital allocation. They also consider if households should move deposits into productive investments. Finally, they present Bitcoin as a potential tool for collateralizing credit and fostering economic stability and growth.
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When Credit Becomes Productive
- New credit becomes productive only when it funds capital that raises future GDP more than debt grows.
- If credit finances consumption instead, debt outpaces GDP and traps the economy.
2000s Credit Fueled Consumption, Not Growth
- Debt outpaced GDP in the 2000s because much credit funded consumption not productivity.
- That pattern increases debt-to-GDP and traps economies unless future productive investment rises.
Money Growth Drives Inflation Absent Productivity
- Credit creation is always inflationary unless productivity gains lower prices.
- Prices rise when money supply grows and only fall if technology or productivity offsets that increase.