Minting more DirtiCoin won’t inflate the currency for one simple reason; more DirtiCoin leads directly to more real estate purchases to back its value. The foundation of a stable currency is a balance between the currency available and the goods and services available.
Declining Buying Power
Inflation is a decrease in buying power. Cutting away all the confusion jargon from monetary theorists, this is the real-world definition.
Inflation results from having too much money chase too few good and services.
Inflation is inevitable as the Federal Reserve injects more money into the economy through what they call “Quantitative Easing.” Adding cash into the economy without adding goods and services decreases buying power. Each dollar devalues and now you need more dollars to buy the same goods and services.
Gross domestic product (GDP) is the accepted measure of goods and services in our economy. Stable prices occur when the money supply grows at the same rate as GDP.
As excessive amounts of money enter the economy, the value of each dollar goes down and prices go up. More money is chasing the same amount of goods and services. Unleashing a flood of money makes each dollar worth less than it was before the flood. The inherent value or quantity of the goods and services available have not changed.
Out of Control
The Federal Reserve appears to enjoy the freedom to adjust the supply of US Dollars (USD) at their whim. On the other hand, the people who hold and use DirtiCoin control the supply of DirtiCoin. In other words, the people most affected by the value of DirtiCoin control DirtiCoin. Nothing could be more democratic. Neither politicians, nor unelected bureaucrats, nor international bankers control the supply of DirtiCoin. Only the people who hold DirtiCoin control its supply. They have their hand directly on the single most important lever controlling the value of the currency, the supply. They are the DirtiCoin Decentralized Autonomous Organization (DAO).
Inflation Concern for DirtiCoin
In the Autumn of 2022, when CoinScope (aka CyberScope) audited DirtiCoin, they noted a “Critical” concern. Minting more DirtiCoin is would cause inflation, (devaluing) DirtiCoin. This is a valid concern for all fiat currencies and for all currencies whose value is not backed by a commodity. Minting more DirtiCoin won’t inflate the currency because this is not true for commodity-backed currencies such as DirtiCoin. Maintaining the ratio of commodity to currency sustains the value of the currency. As the DAO mints more DirtiCoin, DirtiCoin buys more real estate.
Commodity Currencies Are Deflationary
Minting more DirtiCoin won’t inflate the currency because DirtiCoin is a commodity-backed currency. From 50% to 80% of its value is backed by real estate reserves. The target state is for 65% real estate. Liquid assets back the remainder of its value. Monthly updates to the DirtiCoin Asset Ledger (the Ledger) demonstrate the reality of these facts.
Minting more DirtiCoin spurs acquiring more real estate. The unending cycle of buying and selling real estate means there is no theoretical upward boundary on the amount of real estate available to back DirtiCoin. Meaning, it could theoretically continue to expand its supply of DirtiCoin forever, as long as there are sufficient real estate deals to sustain its value.
Owner Controlled Monetary Supply
Brutal realities often mug beautiful theories. An unending supply of real estate deals is a beautiful theory. When the beautiful theory gets mugged, the DAO “burns” DirtiCoin to reduce the monetary supply. DirtiCoin is redeemed from the market and burned by the DAO, reducing the supply and increasing the value of the remaining currency. When the Federal Reserve does this, they call it “tightening.”
Value Gains for DirtiCoin
Minting more DirtiCoin won’t inflate the currency because we buy distressed and undervalued properties, which dramatically increase the value of DirtiCoin. Buying distressed and undervalued real estate is a primary acquisition strategy to build the DirtiCoin real estate portfolio. Purchasing properties at no more than 70% of their full market value is a key success metric. The 70% acquisition cost includes all expenses needed to acquire the property and bring it up to conditions where its sale can command full market value.
In gross numbers this means that the 70% generates a full return of the 70% invested, plus a return above the amount invested of more than 42% (42.871%). Because the DirtiCoin model uses partnerships with local affiliates and real estate investors we know that not all of that 48% will accrue DirtiCoin. Rough analysis puts the DirtiCoin gain at about 14% (0.142857) of the amount invested.
Growing DirtiCoin
The table below (see Table 1) shows the first five planned releases of DirtiCoin. All numbers are shown in terms of DirtiDollars (DiD).
You can see that the target ratios of 35% liquid assets and 65% real estate assets control the use of all the available DirtiCoin. The 14% return on investment, mentioned above, is shown as “RE Equity Growth.” The Asset Ledger Total Value is the sum of RE Equity Growth, RE Invested, and Liquid Assets. The Asset Ledger Total Value backs the value of DirtiCoin.
The DiD Value Ratio, shown in the last row of the table is the result of dividing the Asset Ledger Total Value by the To Date Total Minted to reveal the natural value of each DiD relative to its original value when minted.
Table 1 Five Planned DirtiCoin Releases
Stable DirtiCoin Values
Maintaining the asset ratios in the Ledger while the supply of DirtiCoin increases keeps the DiD Value Ratio constant at 1.09 (109%). This makes DirtiCoin the most stable currency in the world. Minting more DirtiCoin won’t inflate the currency because the required asset ratios prevent leveraging.
Value Growth for DirtiCoin
While Table 1 clearly demonstrates the lack of inflationary effects from minting additional DirtiCoin while maintaining target investment ratios it fails to answer the question of how this relates to the US Dollar value of their wealth. The table below (see Table 2) adds to the table above a demonstration of how this model affects the buying power of your DirtiCoin in terms of US Dollars.
Table 2 DirtiCoin Release Impacts on Changing the USD Value of DirtiCoin
In Table 2, we add the natural value increase of 9% to the value of the DiD at minting. The 1st Release uses the Value at Minting of $97.67. Fully deploying the release using the target ratios the value rises 9% giving the Value at End of Year of $106.74. This becomes the baseline value per DiD for the 2nd Release.
Fully deploying the 2nd Release at target ratios the natural value per DiD becomes $116.65. This becomes the baseline value for the 3rd Release. And so on until fully deploying the 5th Release makes a single DiD worth $152.26. For every DiD in the 1st Release, bought at $97.67, that is an increase in value of 55.89%. That is an average natural value increase of more than 11% per year.
Real Estate Appreciation
Minting more DirtiCoin won’t inflate the currency because the projected gains of DirtiCoin are based wholly on the appreciating value of real estate without regard to the effects of US Dollar inflation on the relative value of real estate.
Throughout most of US history the value of real estate has increased at a rate that exceeds inflation of the US Dollar. During 2021 and 2022 real estate values shot up, then began to drop as interest rates on mortgages went up.
Conclusions
A recent report in Forbes says that median housing prices in August of 2022 are 8% higher than they were in August of 2021. To be fair, that just about matches the inflation rate for the same period, meaning that the real values have remained flat and only been increased by inflation. However, for someone holding DirtiCoin during this same period it means that the value of their DiD increased 9% from the natural appreciation of the real estate and another 8% because of the inflated value of the US Dollar, for a total increase of 17%. This is why we mean it when we say that DirtiCoin protects you from inflation.
To protect your wealth from volatility and inflation you should move as much of it as you can into DirtiCoin, as quickly as possible.
Learn more about how to move your wealth into DirtiCoin here.
