Trillionaire

Monday June 15, 2026

Let’s say I own a few companies and one of those companies has 1 million shares outstanding and I sold 1 share for $100k. The total market capitalization of that company post the share sale is $100 billion dollars.

This is how math works. I am a billionaire. On paper.

This (not imaginary) company actually generates profit. Literal profit. Not through accounting tricks. I could borrow against my equity position. I could borrow up to $100 billion dollars - in theory.

But, if I claimed that the other 999,999 shares were all worth $100k I might get in trouble if I failed to pay back that loan. And in reality no lender would collateralize against private, unlisted stock shares with only a record of one share being sold.

The public sector provides justification for the price of a share of stock and liquidity should the bank/private credit lender decide it needs to take over my company to recoup their money. The latter is more important though. The value ascribed by the stock market is not as important as the liquidity it provides. Because a lender is going to calculate the value of the equity independent of what the dumb market says.

In reality the shares are likely worth $11.

If my company were to get listed (eventually) a lender would loan me money against my equity. But, not at a 1 to 1 ratio.

Softbank just tried borrow $6 billion against an equity stake in OpenAI of $66 billion and got denied for example. A ratio of 1 to 11.

The only way this math can be made to work out, i.e. the $100 billion I am theoretically worth become an actual $100 billion is if the money supply increases. There is not enough free liquidity for any amount of growth in this business to justify that evaluation.

Let me explain. Through a baby sitting metaphor.

Let’s say the entire economy has a fixed amount of dollars. And a fixed amount of dollars for each job description. And that amount of dollars only allows parents to pay $40/week for a baby sitter. You can hire a baby sitter for $40/hour for one hour or $20/hour for two hours but that is all the money that exists to do this.

If you attempt to spent more than $40 in one week you will have to wait another week to pay them. Because the money does not exist this week.

This situation will slow the economy. You either drive down the wages of baby sitters, prevent parents from going out to restaurants on date night, or cause a cascade effect where the baby sitter is owed money but doesn’t have it yet. Which will cause them to delay spending / making payments / etc.

In order to solve this, the government should just print more money. Not borrow money. Just print it. When a new burping baby is born the government just adds $40/week to the pool of “baby sitting money.”

You see the only way to achieve growth is through monetary expansion. Technically, these occur in unison ideally or close proximity. The government could allocate funds during pregnancy or wait until there is a new baby but the funds have to exist before the baby sitter economies experiences growth.

Economies and economic productivity aren’t measured by bananas. If you want economic activity to go up, you have to make the ruler larger. Money printing is a necessity.

Borrowing to support money printing is not. There is no reason a government ever has to borrow. Because the government can tax. Banks already do this. You want to borrow money to expand your business?

Fine.

The bank gets to manufacture money (fractional reserve banking) and if things go wrong the bank takes your business. This is basically a tax.

This is the way the Federal government should work as well. Money should be printed and if people don’t use that money it should just be taken back via taxes. If you use it poorly then the government should take whatever business you tried to do.

The issue with Elon Musk being a trillionaire is that in order for that to actually happen money has to be created. And the way money is created today is through borrowing. If Elon actually ran a business that earned one trillion dollars it would be different.

What has to happen is the Federal government will borrow money from people like Elon to print money to justify the market determined price of SpaceX/Tesla shares. So that inactive pool of dollars, that is just sitting in banks makes interest, but doesn’t pay any baby sitters, will siphon money from the baby sitter economy. Causing a slog in the economy. Requiring more money printing.

This happens slowly. Billion by billion.

Let me go back to the metaphor.

Let’s say that there is exactly enough money for every family with kids to pay $40/week to a baby sitter. What happens in one person who does not have kids takes $40 out of the economy and shoves it under the mattress. This can be a malicious or an accidental one.

Now, there will be at least one family that can’t utilize a baby sitter or has to go into debt to the baby sitter. So the government has a problem. The baby sitter economy is backing up. What to do?

Well, it could just print another $40. Problem solved. Or it could borrow $40 temporarily from the under one guy’s mattress. And pay a nominal interest fee.

Which just kicks the can down the curb.

You can’t tax Elon’s trillions. Because that money does’t exist. In order to tax that “net worth” the government would first have to create that money.

This is the problem - that pretty much everyone on social media don’t get.

The solution is to change the Fed system so that inactive wealth is taxed and at the same time money is printed/expanded to encourage growth.

-AJ