Money, Time, and Space Exploration

Sandwiched between stars, to explore the universe our technological imagination must be matched with a commensurately bold and empowering financial imagination. We transcend our limiting interpretations in technology every day, and it is high time we find the new concepts through which we can address the debilitating assumptions of our financial and monetary economics.”  

Financing the Race to Space, 2024

This post highlights some of the arguments I make in chapter eight, ‘Calendar Time: A Muzzle in Space’, of my latest book, Financing the Race to Space. You can learn more through the books as well as the many different tabs on this site. The main image used above was generated by the author using Chat GPT Image Generator, DALL.E.


The main purpose of this post is to show you how, in fact, debt-based money is a theoretical and institutional bottleneck of cosmic proportions and acts as a muzzle on our evolutionary potential. In truth, debt-based money thwarts and undermines our expansion in outer space.

 

This article aims to demonstrate the above through a purely ‘mechanical’ discussion. I abstain from moral judgements and I am not discussing capitalism, socialism, the left or the right, and/or any other similar narrative debates that seem to be saturating the public discourse today. 

The core challenges we face regarding the nature of money and its creation go far beyond those simplified, repackaged, and ideologically inspired reductionisms that seem to always miss the mark when it comes to addressing the transformations we need in order to ensure an authentically better trajectory for ourselves and future generations. 

Why is debt-based money a theoretical and institutional bottleneck of cosmic proportions and how does it act as a muzzle on our evolutionary potential? How does it thwart and undermine our expansion in outer space?

Our current monetary system is debt-based. In other words, money, in all its forms, digital and/or banknote, is created through debt transactions and instruments. This is true whatever the levels of wealth and capital accumulation. Money is continuously created through debt. 

In an article published in the Bank of England Quarterly Bulletin, McLeay et al. (2014a) describe money as follows:

“There are three main types of money: currency, bank deposits and central bank reserves. Each represents an IOU from one sector of the economy to another. Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves” (McLeay et al., 2014a, 4).

IOU stands for ‘I owe you’ and denotes the debt-based nature of money. In another article, again in the Bank of England Quarterly Bulletin, McLeay et al. state:

In the modern economy, most money takes the form of bank deposits. But how those bank deposits are created is often misunderstood: the principal way is through commercial banks making loans. Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money” (McLeay et al., 2014b, 1).

Therefore, the most common form of money in the modern economy, i.e., bank deposits, is created by commercial banks through the many kinds of loans they extend to their customers. 

Central Banks, like commercial banks, create money through debt instruments and transactions. The first method through which this is achieved is by extending discount loans to commercial banks and financial institutions. The second, is by purchasing bonds and other types of debt instruments in the open market. 

Central banks create money in the form of central bank reserves, and, in parallel, print and manage the banknotes in circulation, which are also backed on their balance sheets with debt securities.

To visualise this, have a look at the US Federal Reserve balance sheet below. The ‘Federal Reserve Notes’, i.e., US Dollar notes, and the ‘Deposits held by depository institutions’, i.e., central bank reserves, are both liabilities of the bank which are balanced on the asset side by debt securities and loans. 

Whether using government or corporate bonds or other types of instruments, debt is the primary and only logic used to back the creation of money on the central bank level as well.

NOTE:
There is an entire chapter dedicated to the US National Debt and Limit/Ceiling
in Financing the Race to Space

The below chart denotes the assets and liabilities of the US Federal Reserve over time. It also shows the moments where the FED started injecting new liquidity (money) through central bank reserves, buying Treasury Securities, Corporate Bonds, and Mortgage Backed Securities – also known as Quantitative Easing (QE).

The process of creating new central bank reserves (QE) is achieved through the purchase of Investment Grade debt securities (high credit rating), public or private, through primary market dealers. The opposite process of selling debt instruments is called Quantitative Tightening (QT), and aims to reduce liquidity.

The Bank of England describes the debt-based money creation process through QE very clearly, and simply:

The money we used to buy bonds when we were doing QE did not come from government taxation or borrowing. Instead, like other central banks, we can create money digitally in the form of ‘central bank reserves’. We use these reserves to buy bonds. Bonds are essentially IOUs issued by the government and businesses as a means of borrowing money” (Bank of England, 2024).

In the below figure you can see the historical evolution of the Bank of England’s QE strategy.

ALL DEBT instruments and transactions used to create money on Earth, whether by commercial or central banks, are structured around one fundamental pillar that gives them their meaning and structure, and that is Calendar Time.

Every loan and every debt instrument created and used on Earth includes a repayment schedule and a maturity date defined by calendar time. Whether government or corporate bonds, whether mortgage loans, business loans, or personal loans, all debt securities involve a calendar time-linked repayment schedule and maturity date.

Calendar time is a human construct. While there are many different calendars currently in use around the world, solar and/or lunar, the one that is used in global business and finance is the Gregorian calendar. 

It was designed by Aloysius Lilius (c. 1510–1576), also known as Luigi Lilio, and was introduced by Pope Gregory XIII in October 1582. In fact, the Vatican celebrated the 400th anniversary of the Gregorian calendar in 1982 (Coyne et al., 1983).

But what is it based on? 

The two most important units of our calendar, a day and a year, are in fact astronomical periods, or measurements. 

A day, made up of 24 hours, describes one rotation of Earth on itself, and a year, made up of 365 days 6 hours and 9 minutes, describes one revolution (orbit) of Earth around the sun.


How do we count or mark our progression on the calendar? This is achieved through the Prime Meridian and the International Date Line.

The Prime Meridian is one of the key conceptual (imaginary) foundations through which we map and structure our terrestrial space. It is the point and the line that allow the above grid of longitudes and latitudes to be. 

Quoting Withers (2017): “[t]he Prime Meridian is the line and the point at which the world’s longitude is set at 0°. It does not exist in any strict material sense, yet through maps and clocks, the prime meridian governs the life of every human on Earth” (Withers, 2017, 5).

The history of the Prime Meridian is fascinating, but I cannot cover it in this short article. So let’s keep going. At the opposite end of the Prime Meridian is what we call the International Date Line. The International Date Line is the demarcation line that separates two calendar dates.

Below is a quote by NOAA (National Oceanic and Atmospheric Administration) that defines the meaning and relationship between the two.

The international date line, established in 1884, passes through the mid-Pacific Ocean and roughly follows a 180 degrees longitude north-south line on the Earth. It is located halfway around the world from the prime meridian — the 0 degrees longitude line in Greenwich, England… The international date line functions as a “line of demarcation” separating two consecutive calendar dates… While the date line generally runs north to south from pole to pole, it zigzags around political borders such as eastern Russia and Alaska’s Aleutian Islands” (NOAA, 2024).

So, money is created through debt instruments, which are structured around calendar time, which is defined by Earth's movements in outer space (1 day = rotation, 1 year = revolution), which are actually marked/counted through an imaginary grid defined by the Prime Meridian, which also defines the International Date Line.

Video Credit: NASA, SVS, Scientific Visualization Studio

 
Now, as you watch the above video, as you watch Earth orbiting the sun, notice the dates changing at the bottom left and try to think of all those humans and organisations, public and/or private, whose mortgage, loan, and/or bond payments are coming due as Earth moves around. 

 

Why is it that our money creation process and architecture is linked to the rotation and revolution of Earth? 

In fact, if you were to ask the above question to central bankers, bankers, financiers, investors, and financial and monetary economists, many of them might look at you surprised, and may not understand what you are referring to.

Counting our days and our time through the calendar is useful and helps us structure our days and productive and non-productive lives. This is beyond question. But linking our entire monetary architecture to the fixed paced rotation and revolution of Earth is an entirely different issue, and it chains our monetary potential to the turning of the below grid.

When are debt payments due? when do bonds and loans mature? when are accounts due? … they are all defined by the rotation and revolution of Earth, by the turning of the grid. This is how and why debt-based money structured around calendar time acts as a muzzle.

"To understand where the limitation comes into play, think of all the instruments used to create money on Earth - loans given by commercial banks, bonds purchased by central banks. They all have maturity dates that depend on the turning of the grid [above]. As the grid (Earth) turns 365.242 times, the calendar moves a year. The grid acts as a muzzle because the entire money supply created within it is attached to the fixed paced turn of the grid and the fixed revolution around the sun."

Financing the Race to Space, 2024

 

The below figure provides the tropical orbits of the other planets in our solar system, including Pluto’s sidereal orbit. All are in Earth days. When our purpose is to expand our reach to other planets that have a very different orbit than ours, the fact that our entire monetary system is chained to the rotation and orbit of Earth is seriously prohibitive.

The below tables provide further details on these planetary orbits, as well as distances and travel times for light and NASA’s Parker Probe, the fastest manmade object in outer space. The point here is to demonstrate that given the different orbits, these planets have very different calendars, in Earth days.

“This is not about general relativity and time dilation, but the simple fact that using calendar time as a foundational pillar of money creating instruments chains us to the rotation and revolution of Earth, which should not come into play when creating resources to invest in a trip to Mars or elsewhere in the solar system. 

Indeed, who cares how many revolutions Earth has gone through when our plan is to leave Earth and establish habitats on a planet that takes almost twice the time to orbit the same sun.” (Financing the Race to Space, 2024).

Linking money creation to debt and calendar time chains our monetary and investment potential to the fixed pace movements of Earth, in space, and, ironically, limits our ability to create the resources we need to expand our reach in outer space, to other planets that have very different orbits than Earth.

Indeed, only a space based money creation process can transcend these limitations. I offer the solutions and the appropriate instrument designs in Financing the Race to Space and will cover them in later posts.

"Our calendar time dependent monetary architecture robs us of the opportunity to create money independently of our orbit, prevents us from creating money relative to the vastness of space rather than the fixed and limited movements of Earth. This is particularly relevant when we intend to change orbit."

Financing the Race to Space, 2024

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“The calendar time-based conceptualisation of money creation chains our productive horizon and chains our reach to the steady turn of the planet on itself and revolution around the sun. Our ability to reach far beyond Earth in terms of distance/time and create life and habitats outside of the grid becomes a struggle.” 

Financing the Race to Space, 2024

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Vidvuds Zigismunds Beldavs

I outline a logic to finance space development based on the assessed value of space resources to which a party has a recognized claim. https://www.thespacereview.com/article/2226/1