A healthy loop keeps two currents in step: the goods people make and the money that claims them. Every failure below is one current pulling away from the other, or the circle draining into one place. None of them announces itself as a collapse. Each starts as a small, reasonable-looking imbalance.
1. Inflation: money outruns goods
If credits and income grow faster than what is actually produced, prices rise, and every credit buys less. The danger for the floor is quiet: a payment that looks the same each month while buying less each year.
The sign: the floor measure rising faster than the cost of building and producing.
What the model does: the floor is a standard of quality priced by the floor measure, so the credit follows real cost instead of a fixed number. The public share is taken from real revenue, not created from nothing, which keeps the money paid out tied to what was actually made. New money is issued by a published rule as sustainable output grows (who creates money).
2. Pooling: the circle drains into a few hands
If most spending flows to a handful of firms and platforms, their returns grow faster than the public share takes back. The loop keeps turning, but each turn leaves more in one tank and less everywhere else. Eventually the many have too little to spend, and the few have more than they can use.
The sign: a falling share of revenue reaching people through the four channels, and rising concentration in the layers everyone depends on.
What the model does: the public share takes a portion of every turn; the closed-field test limits how much of any essential layer one holder can gather; ownership returns follow where the money came from, and the inheritance allowance keeps accumulated holdings from passing down without limit.
3. Money parked in scarce goods
Money that cannot buy more production goes looking for things no one can make more of: land, coast, original art, rare objects. Their prices climb, not because they became more useful, but because they became where idle money sits. That is asset inflation, and it works directly against the promise that a scarce good stays at least as reachable as today.
The sign: prices of scarce classes rising far faster than incomes and the floor.
What the model does: the inheritance allowance moves scarce goods within a generation; the closed-field test limits gathering a whole class; natural commons keep the sea and shore out of the market entirely. The brake: credit for buying existing scarce goods is tightly limited, so their prices track what people can pay from earned money, not what banks will lend. No owner is taxed for what they use.
4. Leakage: value leaves and does not return
Credits spent on goods made elsewhere, profits moved abroad, ownership held across a border: each takes value out of a region’s loop. A region can pay its people and still be draining, if what they spend flows out and nothing comes back.
The sign: a region whose spending leaves faster than revenue arrives, read through ecological leakage.
What the model does: the public share is taken where public inputs are used, so a firm drawing on a region’s grid and permits owes there. Leaving with a fortune counts as a transfer under the inheritance rules. Circulation is read at every scale, from a town to the world, because a loop can be healthy nationally and leaking locally. A second lever: the right to sell in a country carries a share, so every country holds one, including those that host no AI firms (the global loop).
5. Hoarding: money that never moves
Saving is healthy. It is how a person reaches a venture or a scarce good. But money held in quantities no one could ever spend, and kept out of lending and investment, stops circulating. A loop with too much standing still turns slower and reaches fewer people.
The sign: a growing share of money held idle at the very top while spending elsewhere falls.
What the model does: less than it should. The floor and the channels keep money moving at the bottom and middle. At the top, the model relies on the inheritance allowance and the bar on turning wealth into authority. No separate rule: when idle money pulls demand out of the loop, the issuance rule adds money broadly, and holdings above a very high threshold are reported to the measuring bodies.
6. Who creates money
The largest gap. In most economies, new money is created mainly when banks lend, and the terms of that lending shape who gets the new money first and what it is used for. The model has said what money should and should not govern. It has said almost nothing about how money comes into existence, who controls that, and how it is kept in step with real output.
What the model does: two kinds of money creation, kept apart. Public issue by rule as sustainable output grows, entering through floor credits and commission funds; and bank credit, steered toward building and away from buying existing scarce goods (who creates money).
The pattern
| Failure | Current pulling away | The model’s main answer | Open? |
|---|---|---|---|
| Inflation | money outruns goods | floor priced in real terms; share taken from real revenue; issue by rule on sustainable output | no |
| Pooling | money drains to a few | public share, closed-field test, ownership returns | no |
| Scarce-asset inflation | idle money bids up what cannot be made | inheritance allowance, closed field, natural commons, credit limits | no |
| Leakage | value leaves the region | share taken where inputs are used and where firms sell; exit as transfer | partly |
| Hoarding | money stands still at the top | issuance rule offsets; inheritance allowance; wealth-to-authority bar | no |
| Money creation | who makes new money, on what terms | public issue by rule; steered bank credit | no |