Spacial Analytics Crash Course Part One: Economics and Why it Matters

Published in

Game of Life

10 min readSep 21, 2018

Hey Space Fans! Over the course of the last couple weeks we have broken down both Deep Space Industries and Planetary Resources, delving into their current projects, planned missions and corporate aspirations. In those dives we revealed something pretty big, and that is the nation of Luxembourg which is currently setting itself up to become the global “Mecca of Space Industries”. Everyone who is in the current race for the stars has a working partnership or international office based somewhere in the country, which is spending hundreds of millions of dollars to draw such corporations there. We know the end goal, and that is to be on the frontier of space, altering the way we interact with the economic world. Therein lies the rub though, how do we go from where we stand now to a place where a quadrillion dollars is chump change? That is the goal of the rabbit hole today, so I hope you packed a lunch because this won’t be a quick or simple topic to cover.

Introducing: What is Economics

In a sentence, economics is a multifaceted study which attempts to understand, explain and balance the unlimited wants of human society against the scarcity of the resources which are required to satisfy those wants. While overly simplified, that statement holds sway over the entirety of every choice that humans make in our day to day lives, from our choice of breakfast cereal to purchase, the cars we drive, the jobs we pursue and the time we spend on hobbies and other leisure activities. These pursuits are currently studied in 2 major categories Microeconomics and Macroeconomics, with a large number of schools of thought falling under the category of Macroeconomics.

To break them a part simply, Microeconomics is the study of a singular entity (person, family, group, firm, business) and deals with how that individual interacts with other individual variables regarding the economy. (Ex. How does the demand for “X” change if the value of “Y” changes?) It is important to remember that Microeconomics only focuses on a singular variable grouping at a time and does not take into consider external influences which may also effect the choices of consumers.

Macroeconomics, on the other hand, looks at the bigger picture of the world, focusing on issues of interests rates and their effects on GDP, unemployment and it’s effect on job creation and how the total money supply effects both GDP and interest rates.

Both micro and macro economics are related, however, as to understand macroeconomic theory one must also understand macroeconomic theory, and vice-versa. That being said, the study of economics is nothing more then an analysis of how individuals react to changes in the economy and how those individual changes come together to effect the individuals nation as a whole. To take it further, those nations can be then treated as individuals which are reacting to the supply and demand of other nations, and, BAM!!! you get a global economic snapshot at any given time. If you really want to get into the deep water of global economics, you can do so at World Economics. This website is suggested for professionals only, as it has an extremely steep subscription cost of $305, but if you are on the cutting edge of economic theory, they just might be for you (1). Sources of free economic information on the United States can be found at the Bureau of Economic Analysis (2), and for the European Union with the Director General of Internal Market, Industry, Entrepreneurship and SMEs (3). Unless you live in a totalitarian hell-hole (sorry North Koreans, we hope you escape!) you should be capable of finding your nation’s economic data with a bit of digging.

Some Definitions

Before we can move forward, there are more than a few key terms which must be defined in order to understand how the world of economics works. Otherwise, you will be just as lost as I was the first time I had to work with math involving M#’s, so without any further ado, let the brain squeeze begin:

Rational Person — everything in economics assumes that all individuals are rational, or that the choices they make are done so to the best of their knowledge with all the information presented to them. This assumes that no one intentionally makes choices which will sabotage their lives.
Need — any item which is determined to be necessary for continued survival. Wikipedia defines the list of basic human needs as; food, water, clothing, shelter, education, sanitation, and healthcare (4).
Want — any item, activity, or desire which does not fall under the category of need.
Scarcity — specific conditions which arise so as to ensure that there are not enough resources to fulfill all the wants and needs of society.
Labor — the combined effort of people with all their abilities and skills.
Entrepreneur — a risk taker who seeks profits by utilizing resources in new ways.
Trade offs — the process of giving up one thing of value to receive something else of value in return.
Opportunity Cost — represents the loss of potential gain when one choice of action is chosen over another. Every choice you make presents an opportunity cost, no matter how trivial. (Example, going to college represents an opportunity cost, as you could enter a trade and start making decent money immediately, or delay for 12–14 years and earn more money then the tradesman could over the long term).
Production — the process of creating goods and services.
Economic Expansion — a period of general economic rise measured in real GDP growth and is categorized by more goods being produced, higher wages, lower tax rates, and less unemployment.
Economic Contraction— a period of general economic decline and is typically accompanied by a drop in the stock market, an increase in unemployment, a decline in the housing market, and is generally less severe then a depression. This is also known as a recession. When viewed on a graph, these are the troughs, or low points.
Economic Depression — according to the National Bureau of Economic Research (5), a depression is nothing more then an economic contraction which has pulled back much farther and longer then expected
GDP — the dollar value of all final product goods and services produced within a country
Money supply — the entire stock of currency and other liquid instruments floating in a nations economy at any given time. Broken down into several categories.

M1 — money supply that includes physical currency and coins, demand deposits, travelers checks, checking deposits and NOW payments. It is important to remember that cryptocurrencies such as XLM, NPXS and DCR are attempting to function in this category by becoming a source of payment in our daily lives.
M2 — encompasses all of the M1 supply as well as savings accounts, mutual funds, money market securities and other time deposits. 1st Gen block-chain application such as BTC, LTC and ETH which have gotten slow and fat have shifted their focus to this category to function as a “store of wealth” rather then a practical day-to-day commodity.
M3 — encompasses the M1 and M2 supplies of money while also including large time deposits, institutional money market funds, short term repurchase agreements and other large liquid assets. As much as haters love to hate, XRP and Ripple are the only real crypto projects going after this supply of money.

**Please note that there are other valid crypto projects for each of the categories of the money supply, I just listed the ones which would be most recognizable to everyone. It is easy to see that the economic variables of the world are vast, which leads to a large playing field for cryptocurrencies to maneuver. Anyone who thinks that there is only room for the 1st Gen block-chain companies will be sadly mistaken when the world’s economy grows too large to effectively handle those low cap coins.***

So Now What?

Now you have a basic understanding of some of the most important terms in economics, which is a great start, but only scratches the tip of the iceberg. Next, it is important to know that there is a LOT of math that goes into economic equations, but thankfully it isn’t very difficult mat, just tedious. I am linking a pretty thorough YouTube playlist that breaks down more math concepts then you might ever need (6), for anyone who is feeling froggy, but definitely not needed in the context of everything else I am going to get in to today.

The field of Macroeconomics is further broken down into dozens of different schools of thought some much more prevalent then others. The big schools to remember though are Marxist, Keynesian, Austrian, Chicago and Chicago, but there are tons more that all offer various tweaks to the rules that governments should play by in order to keep the global economy under control and steadily progressing at a pace that isn’t too fast or too slow. Wikipedia has a pretty exhaustive list of the major and minor schools of thought (7), and like the math, feel free to study up if you are feeling froggy, but the big 9 are more important to consider. A cheat sheet for them can be found below from Ha-Joon Chang’s book Economics: A User’s Guide (8), as well as a Crash Course video which quickly breaks down the history and evolution of economic theory and outlines the major players.

From Ha-Joon Chang’s Book *“Economics: The User’s Guide”*

At the end of all of that, we pretty arrive at the point where we have to admit that Economics is a soft science that is ever changing and no one really has a clue how we should move forward in the world. While there are many that profess to being “the one true answer” I believe personally that they fall into an economic thinking trap. Just as economics assumes that all individuals are rational people who are not willfully making choices which will negatively effect them, it also requires economists to view the world, “as it is currently, not as we would like it to be.” This is an important concept rule, but also breaks the game for many. By viewing the world as it is ensure that personal beliefs and idealizations of “how society should be” get left out in the rain, but in the process I believe it breaks the cycle of critical thinking and economists stop looking at what is coming over the horizon and instead focus down in the weeds. Which brings us right back to the stated goal of Spacial Analytics, which is bring enlightenment and knowledge to a wider base of people, potentially realigning the viewpoints of many so humanity as a whole can be more prepared for our next step.

What Comes Next?

Today we gave a BRIEF overview of the economic world and provided a little bit of context for the future. In Part Two, I will talk a bit more about expansions and contractions, take a deeper look as to the causes and effects of the 2008 contraction, as well as briefly touch upon the chart posted below. Finally, I will be introducing cryptocurrency into our economic mix, and start connecting the dots together so explain why Satoshi’s creation of Bitcoin in 2008 came at the perfect time to forever alter the economic future of the world.

Image cutesy of the International Monetary Fund

Thanks and External Links

As always, thank you for time and your support in SXB. It means a lot to me that there are so many of you who care about this project, and have supported me thus far. If you enjoy the information delivered, consider following us on Twitter and joining our Telegram channel to stay more readily abreast of the latest news.

Space Bucks News Telegram Channel — https://t.me/SpacialAnalyticsNews

Space Bucks General Chat — t.me/SpacialAnalytics

Twitter — https://twitter.com/officialsxb

Tron Tokens — https://www.trontokens.org/token/trc10/SpaceBucks/TEpRQETjVvAqADoZCvL4gehjxFAhXbRU3E

Tron Scan — https://tronscan.org/#/token/SpaceBucks

Ok, before everyone gets too excited there is something that everyone needs to read and remember, cause I will be saying it a lot… Neither Spacial Analytics nor Christopher Nettle or any of their affiliates or partners in this endeavor provide tax, legal, accounting, financial, or investment advice. As a whole, I am just a guy on the internet who knows a few things about a few other things and none of this should be construed as an attempt to coerce you to invest in any avenue other than those which you fully investigate yourself. You should most definitely not take my word for anything, and consult your own legal, tax, financial, accounting, or investment advisers before engaging in any transactions… that is all.

Works Cited

World Economics. https://www.worldeconomics.com
BEA. http://www.bea.gov
IMIES. https://ec.europa.eu/growth/about-us
Wiki. https://en.m.wikipedia.org/wiki/Basic_needs
Nation Bureau of Economic Research. http://www.nber.org/
YouTube. https://www.youtube.com/playlist?list=PL4BB70F177D6E66B2
Wikipedia. https://en.wikipedia.org/wiki/Schools_of_economic_thought
Amazon. https://www.amazon.com/Economics-Users-Guide-Pelican-Introduction/dp/0718197038

Don’t forget to give us your 👏 !