Let's revisit our soccer field analogy. Think of the goalkeeper as the reserve bank, distributing balls (or money) to the teams on the left and right. The right side seems to have a knack for holding onto them. The goalkeeper, favoring the right side, leaves the left side lacking in balls and opportunities to play.

This system can falter. The Basel standards act as rules, outlining how the left side can borrow from the right if they accumulate too many balls. If the right side passes a ball, statistics suggest they can generate 10x-20x more money to lend out. The system self-regulates, without the need for the goalkeeper's intervention.

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This is what sets market competition apart from a race. Financial market competition opens up access to various capital sources, such as central bank funds, government funds, foreign investors, foreign sovereign funds, forex markets, investment banks, retail banks, insurance companies, and wealthy individuals like angel investors and accredited investors.

The more accessible these sources are, the smoother the market operates. Competition ensures that interest rates align with actual risks. Any imbalance can lead to the loud bankruptcy of companies like crypto funds or exchanges. This happens when interest rates don't reflect actual risks due to insufficient information being collected and shared with investors. Any discrepancy between risks and interest rates results in money being transferred without a product in exchange, creating an inefficient system. Such transfers will eventually drain the fund source.

Banks engage in rate matching and comply with the Basel standards to maintain liquidity.

However, these rules are based on spot statistics, which can sometimes be inaccurate and fail to provide a comprehensive picture, especially in the case of rare events. Alan Greenspan was known for using statistics to set interest rates, but his approach arguably led to the Great Recession. The Basel standards also didn't prevent the collapse of Silicon Valley Bank or FTX.

It's crucial to understand that markets are not a race, but a competition. A race is rare and usually either a form of entertainment that pays a premium or is related to mating and evolution. A race has a single slot that participants compete for. Competition, on the other hand, ensures that enough slots are available for each participant in the long term. Winning here means life, growth, and survival.

Competition smooths out the banking system. If people start racing, the system becomes distorted, and zero and negative sum games may emerge. This happens when young people start selling questionable crypto coins to the elderly instead of focusing on their studies. Or when the unemployed look for jobs in casinos with the chance for tips. Wealth transfer across generations has never worked well because accumulated wealth is the result of past central bank policies and has nothing to do with the current capabilities of the economy.

Steve Forbes, the editor-in-chief of Forbes, suggested a solution earlier this year. The US economy was once very healthy under the gold standard. If you couldn't afford a farm, you could mine gold in California, then return to Ohio and buy your farmland. This isn't possible today, and cryptocurrencies have even more flaws than the overnight federal funds rate. A potential solution is to give citizens the power to raise debt for employers, similar to voting rights. This would create an economic situation akin to the rise of the frontiers.

Returning to our soccer field analogy, the current imbalance between the left side without balls and the right side with balls needs to be addressed. Some might call it meritocracy, but many people inherit wealth rather than earn it. Teachers may emphasize hard work, but this often means racing for a limited number of slots. And one school may disagree with the decisions of another.

This has led to the oligopoly of large investment banks. You might pass the SIE exam as a finance professional, but you need a sponsoring institution with a license to work. This limits supply. Investment banks might allow Disney to raise money for a theme park but hesitate to do the same for a nearby competitor. What if oversupply leads to bankruptcy for both ventures? It's a plausible scenario and smart thinking, even without any suspicions of cartels or syndicates.

The Basel standards, along with down payment requirements, have helped. But the ruleset is complex, and statistics can occasionally fail, as the Great Recession showed. Big data might push companies to hire until a down payment is collected, then lay off workers to start building the next generation's down payment. Banks don't want such risks. Allowing a bit of freedom to raise debt from the government is a sensible approach, as it has worked with voting rights.

A sensible approach is to raise funds from potential employees. If a town has a thousand jobless people, they have the time to check whether another theme park is feasible. More people will make more sensible decisions in free markets with good information sharing. If they don't have the funds, guaranteed credit for citizens by the reserve bank might be an option.

Why hasn't this happened so far? The answer lies in education. Feasibility analysis requires knowledge that costs money to obtain. Less education led people to assembly lines that could produce cars cheaply through labor sharing at Ford.

This works until there are only a few types of products. With tens of thousands of products in this century, labor sharing becomes difficult to maintain. A town with a population of ten thousand, divided into five professions, might be able to build four large factories. But five thousand products require the specialized knowledge of a thousand small businesses with one or two employees. Any fluctuation becomes more prevalent with more choice, requiring even more learning. This is what creates the imbalance of balls on the left and right sides of the soccer field.

Indeed, meritocracy has its problems. The wealthy are often frugal. Forcing them to consume unnecessary services or engage in philanthropy is outdated. Similarly, it's better for young people to focus on their studies rather than volunteer for questionable causes for dubious reasons. This works temporarily on a small scale. Forcing people to care for the elderly when it might not be needed can be problematic, especially if the client can't afford to pay for health insurance and retirement benefits.

Racing divides people. Competition builds capital and prosperity.