Note: The Monday Taki post is up and related to this post. All of a sudden, macroeconomics is becoming an important topic again. The Sunday podcast is also up behind the green door.
The technical definition of money is “something generally accepted as a medium of exchange, a measure of value, or a means of payment.” For most people this has always meant the legal tender of their homeland. Until fairly recent, this was a coin with the face of the king on it. The better the reputation of the king, the more valuable his coin, because traders were more likely to accept it. A good king made sure his coins had a consistent amount of gold or silver in it.
The reason for that is precious metals like gold and silver were always the world’s reserve currency. Everyone in the world would accept gold and silver for payment, even in places that restricted the use of the metals. You could always take the metal to the king’s mint and exchange it for his coins. Granted, he took a fee for himself and you were charged the cost of minting the coins, but that was predictable. In the end, all currency was measured in gold and silver.
We no longer use gold coin for money. Every country in the world uses what the economist call fiat currency. This is a government-issued currency that is not backed by a physical commodity, such as gold or silver. Instead, it is backed by the “full faith and credit” of the issuing government. Money is now an expression of the government power behind it. The US dollar is the reserve currency of the world largely due to the fact the American government was the most trusted.
Hard money enthusiasts assume this means the United States can print as much money as it needs, but this is not exactly true. The international monetary system that evolved after the collapse of the Bretton Woods system in the 1970’s is a framework that controls the exchange rate of the major currencies. Every major currency is based on the dollar, just as oil and gas are priced in dollars. The petrodollar was created in the 1970’s when the Bretton Woods system collapsed.
What the current system does, in effect, is link currencies to the supply of crude oil through the dollar. How much oil you can buy with your home currency is dependent upon how many dollars you can buy with it. It is not a direct link, as oil production rises and falls and the supply of dollars rises and falls, relative to other major currencies like the Euro or Chinese Yuan. In effect, America controls the world by controlling the price of commodities like crude oil and natural gas.
In the old days, minting coins was a profit center for the king. A strong king would restrict the use of other coins in his domain. His people had to take their foreign coins, gold and silver to his mint for conversion to his coin. In addition to the cost of production, he tacked on a profit for himself. This is called seigniorage and it works the same for fiat money as it does hard money. This profit from controlling the global currency is one way the United States has grown so rich.
One of the consequences of this system is the world has an insatiable appetite for US government debt. Because it is denominated in dollars and considered the safest of financial bets, it makes the ideal collateral. This has allowed the United States and other Western countries to run massive trade and spending deficits. The world wants the debt and the world wants to sell the West their products. US debt was 30% of GDP in 1980 and now it is 127% of GDP.
This is the subtext of the Russo-Ukrainian war. Russia and China, especially China, are tired of this arrangement. They correctly see it as to the advantage of Washington at their expense. This is why China is backing Russia’s play to demand rubles for its energy and agricultural products. This would pave the way for China demanding yuan for its products and the right to pay for energy in yuan. India is also quietly supporting what the Russians are doing for the same reasons.
This is why Washington is in no mood to strike a deal over Ukraine. It is not the only reason, but it is a big part of the plan to protect the dollar. If Washington can break the Putin government through financial war, China and India will drop their plans to buck the dollar in the global economy. A century after the Great War, the new global war is being mainly fought in finance. The West, led by America, is now at war with the world over control of the global currency system.
It is probably a war that the West cannot win. The reason is the same reason the king would put his face on his coins. Money is the physical expression of power. The strong king could enforce his monetary policy in his domain and his money had a predictable amount of gold and silver. In effect, his money was the representation of his people and the cultural that defined them. The legal tender of a country is the measure of that country’s wealth and power relative to the world.
The West no longer makes or invents anything useful. The power of the West is the legacy power to control the financial system. It is a system arranged by Mercurian people in order to control the Apollonians. The former are the people who operate as middlemen and service providers, while the latter are the people who grow the food, make the goods and keep the gears properly lubricated. The former operates in the West, while the latter exist outside the West.
Reality is the thing that does not go away when you stop believing in it and reality says that growing and making things counts for more than thinking of things. The reason Washington has not crushed the Russian economy is the world needs the stuff Russia pulls pout of the earth. In this economic war of attrition, Russian can feed itself and keep its homes warm, while Europe will have to hope America can provide the food and energy at a reasonable fee.
The most likely outcome of this global conflict is something people have suspected for quite some time. The global currency will become a basket of commodities like natural gas and crude oil. Maybe agricultural products will be in the mix. The reason for this is the world runs on energy and food. Bretton Woods III, as some are calling it, will be a new set of currency arrangements whereby money is based on its purchasing power for the agreed upon basket of products.
What this means in the short run is that the West is about to get poorer as governments are forced to cut spending and debase the currency to get out from under domestic debt obligations like pension payments. It also means the end of globalism as has been defined by Washington for three decades. Trade will continue, but between countries rather than independent global enterprises. Thirty years after the Cold War the world is about to start healing and return to something close to normal.
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Pingback: We are in World War 3 the fight for economic dominance. It is a five (5x) front war.
Things can be kept going for quite a while for some sectors of the population. Welfare, special subsidized/free food and medical care. YOU will not get that, but Regime people including Big Corp execs and middle managers (some anyway), political people and bureaucrats, and of course “protected class” people. They will all get special free or discounted food, line jumping privileges, free health care, and all sorts of other subsidies.
You can guarantee that one way or another, the EBT cards will be working. Period. Your debit card will not.
YOU will see the Great Reset in action. Brandon is already prepping wage and price controls. Brandon will ration your food intake, your spending, your health care, for deplorables and other undesirables of course. Illegal Aliens will get all sorts of free stuff with no limits as the border is totally open (during an inflationary recession).
But wait, there’s more! Brandon can *COMPEL* your labor by the draft. No reason he can’t use it (deplorable males only) to fill all sorts of needs. [Already sort of in place with National Guards in hospitals, running school buses etc.] Skilled labor, and just low skilled manufacturing labor. Nothing is cheaper than FREE! and Brandon’s team is just the one to create that for Nike, Apple, the like. There is a reason they pushed him over the line. This is it. Why go to China for forced free labor when you can get it at home easier and cheaper?
Brandon is extremely predictable in one sense: the more stupid the action, the more likely, particularly if it pays off some marginal domestic constituency at the expense of the majority. Its a force of habit. The urge to keep living standards for Vibrants and Illegals and various Karenite functionaries will be habitual and irresistable.
This is spot-on. But how long could such a system be maintained? Months? Years?
It’s true that productive people have been under the yoke of the elites for decades now, but if true hardship becomes widespread, we might see more pushback than any of us have seen in our lifetimes.
And this, my friends, is why accelerationism has a certain appeal, as in “Let’s just get this over with already, so our kids and grandkids might have a better life.”
Z has some influence, while we have next to none, thus the appeal of fatalism. The tide is too strong to overcome. Pay attention enough so that you can prepare, as did Noah.
So sit on the river bank and watch the river flow. Move to higher ground as the river rises. Keep on grilling! Eat, drink and be merry, for tomorrow, after the flood, from the mud, the Phoenix will rise to fly again!
On a side note, the Belt and Road Initiative seems far better than neocon piracy.
But, look at what people they’ve got to work with! Can you imagine the cesspool of corruption, nepotism, infighting, and general f*ckwittery to come from all that.
Belt and Road seems to be failing. Sri Lanka’s cabinet resigned, they have widespread protests over rising prices for everything and declining income. The government has to pay China massive amounts of foreign currency to pay off that new port, and China will only forgive the debt for a 99 year lease on the port.
Belt and Road depended on cheap energy and thus cheap food to keep the Third World functional. That seems no longer the case.
“Belt and Road depended on cheap energy and thus cheap food to keep the Third World functional. That seems no longer the case.”
Russia is the no. 1 exporter of oil. They can supply China with all the oil they need, especially if they cut off the West. It might depend on what the Russians decide to do about who gets oil and what price, and who gets no oil at any price.
The possibilities are myriad.
If you have a couple hours to kill, the documentary “Empire of Dust” (On YouTube, but the one I viewed apparently cut off before the end. ) is worth a viewing. Or just view the trailer. It documents a “Belt and Road” (Chinese) team’s travails in trying to get anything constructive done in (I think) Senegal.
spoiler alert…Africa wins again.
I may sound like someone searching for a quarrel, but I think the new arrangements will be extremely traumatic for Yahweh’s self chosen. No, I don’t mean just the International Jew, so-called. I mean the normal Jews, too. As things unfold, and as it effects everyone all around the globe, some things will become quite obvious to all, and things will be said, and perhaps done, to openly address long standing cultural issues that contributed to the problems we now face. I think normal Jews, both secular and religious, have been so cocooned in the West against criticism of their values and behavior, it will be shocking and upsetting when it happens on a larger world stage. Debt and manipulation of markets are serious problems. And, as it turns out, we don’t really need middleman. Especially foreign middleman. The Jewish Century is over. And there may be a destructive temper tantrum from the self chosen in response.
Interesting times. Dangerous times.
No quarrel from me, my friend, the Nose has been fucking people over for 1000’s of years. This ain’t nothin new. Why have they been kicked out of every Western country? Evil motherfuckers wanting to shoot up your kid with a clotshot., no more needs sayin. Money Magic and profiting from death and destruction has always been their game..
Boy, do I appreciate that optimistic note at the end, Zman. Because Michael Yon and such are saying things like “global Holodomor” and “worldwide starvation-level famine” and Grampa is f**in’ scramblin’.
Not ready. I am so not ready!
I’m trying to think of a successful movement that didn’t have a positive direction to it at some level. At the very least the promise of a better life for our children has to be front and center to any DR message if it hopes to attract more support.
Glad you mentioned that, KGB. Some of the sites on “our” side are incredibly negative and full of Christian End Times bullshit. I agree we are in bad times, but we have to keep up hope. Another good sign is that we have some really good looking women on our side. P J O’ Rourke said that the sign of a successful social movement is that it attracts the hot chicks. We have them. The psychopaths only have blue haired land whales and oldies like Lagarde with faces like a dinosaur’s scrotum.
Don’t feel bad . Its not possible to be ready for something like that if in any way shape or form you operate in modern society.
The only way you could have been “ready” is if you lived far from civilization and non members in a heavily armed farmstead that was self sufficient.
On those grounds not even Amish are ready.
Side Note: I’ve lived cheek to jowl with expanding Amish communities here where many of them are migrating to in Southside Virginia. Trust me …. they are armed.
The sporting goods stores even sell Amish hat shaped orange covers for their traditional headgear.
People fear the unknown. Better the devil you know than the angel you don’t. The collapse of the monetary system is on par to most Americans with nuclear war. However, the world has had hard times in the past and civilization survived. I am reminded of the inflation of the Weimar Germany period. Spouses would show up on payday to get the husband’s paycheck spent before the prices rose again. Even then, it supposedly required a wheelbarrow full of marks to buy a loaf of bread. But, do you ever hear of a statistically significant increase in the deaths of the Germans? My point is people adapt to the situation they find themselves in. And Americans will too, when the collapse comes. And Americans could stand to shed some of their fat they accumulated on their sugar rich diets. A lot of people could survive a year of two on their fat before they go all Biafran baby.
One of my concerns is that even though I have silver coinage awaiting the apocalypse, it is going to take some time to re-equilibrate what the worth of that silver will be. There will be a period where some greedy hoarders extract more than their product is worth, just as some altruistic individuals will be taken advantage of. However, eventually it will settle back to where a loaf of bread will cost a silver dime. People will want to “win” in any transaction, but they will realize that stability and trust are more important for long term survival.
“I am reminded of the inflation of the Weimar Germany period.”
You need not go back to Germany of 100 years ago. Simply point to present day Argentina–with 50% inflation. Saw a video the other day where citizens were asked how they cope. Seems the monthly paycheck or pension is completely spent the day received. Example, a month’s groceries bought immediately because it will be priced higher at the month’s end.
Odd thing was, every citizen interviewed had the generally correct economic answer to the national inflation problem–stop spending more than you take in–even naming things like “free” health care and education.
Compsci: And yet the population will continue to vote for that same ‘free’ health care and education. Because most people are fairly stupid and irrational, and the lower half of the bell cure wants what it wants and considers ‘fair,’ consequences be damned. Argentina has been an economic basket case for decades, and its population has increased and browned over those decades as well. The two things are most definitely connected.
Yes indeed. I maintain that Argentina is basically a European country in Latin America, and as such can teach us some lessons by example. They were–at the turn of the 20th century–on par with us in GDP. Then in 50 years, they became a basket case. that’s how fast things can go to crap.
“fairly stupid and irrational”? People are f-ing insane. Look at the last 2 years.
Russia, 1990.
Argentina, 2001.
Venezuela, 2015?
People eating their goshdam dogs and cats, for crissakes.
Tractor fuel and fertilizer, that’s what’s on my mind.
I get the war thingie now, though. The Bush doctrine- a war to inflate the Owners’ asset prices (housing). Bernanke was desperate to prevent deflation, remember? Trying to inflate their way out of the debt, a vicious circle.
“And Americans could stand to shed some of their fat…”. No joke. Went to lunch today and the number of table grazers wandering in to stuff their faces – after removing their masks of course, was amazing. Two fat biddies could barely squeeze into the booth – they could definitely survive on their stores for a few months…
“My point is people adapt to the situation they find themselves in. And Americans will too … .”
But how will they adjust?
Reliable estimates of death from starvation in the US during the Great Depression range from 7 million to 12 million.
Difficult to calculate for outright lies, though, just like today. How many died from Covid? Given that there is no diagnostic test, ALL the figures bandied about are outright lies. But they remain “official figures.”
During the Depression., starvation was recorded as “heart failure” or “typhus” or other opportunistic diseases. Anything but the truth.
do you have any documentation for that?
At the ending of the movie Borat (The Jewish written anti-slavic remake of Der Ewige Jude), they have a fake national anthem for Kazakhstan with the line “Kazakhstan number one exporter of potassium, other countries have inferior potassium”. The obvious joke being how primitive and stupid the Russians are to just produce food and minerals instead of inscrutable financial instruments and internet pornography like the super smart chosen people.
Hahah, joke is even more funny now that I pay $5 for gas and $3 for box of crackers.
Not!
Not sure if noted here, but in the past few days, the Bank of Russia has offered to buy gold in a set ratio to rubles from Russian banks. This is brilliant. Whether it works or not – different story. But this not only hoards gold in a time of economic uncertainty (what the heck is in Fort Worth anyway?), but also pins the ruble to gold. That has to look attractive to countries like India and China. Scary times, indeed.
“Money is merely tokenized energy.”
Not sure where I heard that, but I feel Russia is teaching the West some lessons about this point.
“Russia is teaching the West some lessons about this point.”
This presupposes that “the West” has the capacity to learn.
I see no evidence of such.
Russia is offering us lessons. We aren’t listening.
Did they move it? I thought gold was in Fort Knox.
Sorry, I meant Knox. It’s a Monday morning 🙂 Who knows is my point? There are all types of rumors about Knox being emptied. We certainly are not privy to the information.
I thought they actually did empty Knox and move it to the basement of the NY Fed, which was a major plot point in Die Hard With A Vengeance.
Too bad John McClane made it through all of that only to be felled by the jabs.
Goldfinger made a crack at Fort Knox with his band of hottie pilots. 007 stopped him.
No you can literally drive by Fort Knox gold storage facility, about 200 yards away. Just a couple of fences. I doubt any gold is stored there.
I thought the gold in Fort Knox has gone missing.
a man in a vintage Rolls Royce took it, aided by his large Korean valet…
And his compromised sidekick, Pussy (or perhaps Poosey) Galore…
“I thought gold was in Fort Knox.”
A lot of folks think that. But here’s a suggestion: Find out the date of the last audit of Fort Knox.
Who did the audit?
Who verified it?
That’s what I meant– I think the gold at Fort Knox is gone (gone missing).
The 194th Separate Armored Brigade (-) was inactivated at Ft Knox in 1995, around the time I was there for the Armor Officers Advanced Course (I was not branch Armor … it was just a better course than my own branch’s “gentleman’s course”).
Word in casual conversation was the 194th had as one mission a tasking to guard and provide a quick reaction force for the gold depository. So, about that time …..?
I think you meant Fort Knox.
OT: Unconfirmed sources from Russia Military:
The Russian army captured the
U.S Major General Roger L. Cloutier Jr. Maj. Gen. Roger L. Cloutier, the U.S. Africa Command HQ Chief of Staff in the besieged Ukrainian Azov camp in Mariupol 🐠😂,
The Pentagon wanted to contact Putin,
also president potato head calling for war crimes trial of Putin. fast on the heels of calling for Trump to be tried. someone thinks they are king of the world. time to call time on this malignant maniac, one way or the other.
I’m not entirely surprised. The Georgian force that went into South Ossetia in ’08 was completely trained by US military advisors and contractors. This is that situation turned up to 11.
I also wonder if the building mess is why the Lightbringer is going to the White House to pimp Obummercare this week.
Obummercare, really?
Springing the medical tyranny trap, eh?
I guess it’s pointless to ask what the F!!! an American general was doing there, IF confirmed. (If he was there advising on how to snipe Russian generals, as rumors have it – something that tends to p*ss off powerful people and make them paranoid – I’d rather not know that).
What’s the cause of nuclear war?? Alzheimer’s….
If true the Russians will make hay of it but otherwise it won’t be a big deal since they favor the same tactics along with little green men.
He’ll be swapped like Anna Chapman was
Major Generals don’t run sniper schools. So that’s nonsense.
Asovstal is the largest steelworks in Europe, with seaport access. It is an essential element to hold.
Maybe, as Hilary would say, snipper schools.
They train mohels?
Interesting if true.
“There have been reports” that Ukraine tried several risky helicopter evacuations from the steelworks by Mariupol. Some reports say the helicopters were shot down, some say a couple of helicopters got away.
I’ve heard the Russians let the passengers load, then shot down the helos after they took off. I’ve also seen rumors that a couple choppers got away.
If there were high-level NATO members trapped there one has to wonder if any of their helicopter special operations units were involved:
https://en.wikipedia.org/wiki/160th_Special_Operations_Aviation_Regiment_(Airborne)
https://en.wikipedia.org/wiki/4th_Special_Forces_Helicopter_Regiment
His current billet is Allied Land Command, which are NATO forces SE Europe. HQ in Turkey.
So this is the right general area. The fact that the “rumors” got this wrong probably mean this is bogus. Incredibly reckless for a general officer to be in a non allied theatre.
Probably never know. He’d be a bargaining chip; the Russians won’t tell, nor will the US.
If they did capture him they would parade him around like crazy. It would explain the bad performance relative to expectations. It would also be quite risky but in character with US actions in Ukraine.
However I don’t believe it. For the simple reason that the US no longer has fighting Generals. Woke ones, yes. Fighting ones and those willing to be in danger, no. Gen Milley is the very model of the modern Woke General. There is no reason to think anyone beneath him in rank would be any different. Woke, toady, and fat. Sniffing danger and like Justin Trudeau running fast the other way.
“U.S Major General Roger L. Cloutier Jr.”
Ah, yes. “The very model of a modern major general.”
https://www.youtube.com/watch?v=R1dy44jV8EM&fbclid=IwAR2o9m_8Sb3FUj117wREysfsEDx_rFPvKSoakuPl7fMZCd0WHz3knTxKQX8
“In the old days, minting coins was a profit center for the king. A strong king would restrict the use of other coins in his domain. His people had to take their foreign coins, gold and silver to his mint for conversion to his coin. In addition to the cost of production, he tacked on a profit for himself.”
In other words, governments are money changers in the Temple, ripping off the people who are dutifully making the “sacrifice.”
And we wonder why (((they))) have come to dominate Western governments.
so you are saying there should be no money?
How ’bout interest, and capital, paid to the nation and its people.
The way the save the world is to end the BIS bank syndicate, and their scrip.
Our “debt” to them is illusory.
“The way the save the world is to end the BIS bank syndicate, and their scrip.”
Better yet, return to *local* economies and *local* banks.
Most trade in the past wasn’t conducted with coin. It was stuff for stuff so this wasn’t as big and issue as it seemed.
Also Medieval Europe banned interest for the most part which only became a problem when some king or other noble needing to display his status or go to war found out that his tax base would not support it. Than the various money lenders got an in
That Jews though would often as not be subject to a pogrom or expelled , it happened several hundred times historically IIRC.
interest (usury) was banned well before medieval times. both christian and muslim countries proscribed it.
Usury gets a bad name. Jews were often money lenders, so they took the blame. Both Christianity and Islam had/have limitations upon usury, if not outright bans Problem: if one can’t make a profit loaning one’s money out, what incentive is there? Not all that long ago (at least in the USA) a compromise was reached: interest could be charged, but only so much. Above a ceiling it was “usury.” Some economics writers have said, validly I think, that a primary reason the Muslim world fell behind the Christian was its proscription against usury, effectively stifling what we’d now call finance. Bet they did not teach you in world history that the non-Christian (e.g. Muslim) East was more prosperous, advanced culturally and technically, than Europe, still mired in its dark ages, until perhaps 1500 or so, when we finally took the lead. This, in part, explains the bittersweet nostalgia Spain felt for the defeated Moors of Toledo and environs post-1492: they realized what a cultural treasure they had wiped out.
Credit and debt and the interest that comes with it is not a universally bad thing. It’s like fire: used sensibly and properly, it can help a civilization grow. Used stupidly, it tends to disaster for the individual, the family, the village and the nation. Sadly, given human vices, the latter outcome tends to be the most common.
So much for the Great reset. Only white countries will likely continue to fall for that. The Russian sanctions have speeded up the split of the planet into a multipolar world. On one side you have most white countries that are gynocracies and are operating in tune with the philosophy of a small hostile tribe. On the other you have pretty much everywhere else most of which are more patriarchal and nationalistic.
“What this means in the short run is that the West is about to get poorer as governments are forced to cut spending and debase the currency to get out from under domestic debt obligations like pension payments” – We’ve been getting poorer in the U.S. since the early 70’s, we’re just going to feel the brunt of the poverty we already created. That’s the ultimate tragedy of having the reserve currency. The economy never fully adjust to an equilibrium that attracts productivity, so industry gets hollowed out while the country is sedated under its reserve status. The break in reserve status means a free-fall to the country’s real equilibrium of acquiring productive capital, as foreseen and laid out by Triffin in 1960.
Looking at our country, a country that can’t even have a movie award show watched by a billion people without guests “actin’ the foo,” and all the tik-toc videos, etc., what is our new equilibrium going to be? I’ve said for awhile that Brazil is our future. It’s the closest resemblance. So when some scandal breaks like the one about the Flint, MI water system, instead of the entire country hand wringing over systemic racism and injecting half a trillion into it, everyone will just shrug their shoulders and say “and…so what?” The country will devolve into small parts that work, big parts that don’t work, and everything in-between. Places like Alaska will want to leave the union entirely. Place will become vitally important for the lifestyles we want to live.
If there is hope for the West, It lies in Hungary.
https://www.zerohedge.com/geopolitical/will-viktor-orban-bring-down-house-davos-built
And that’s a line I never thought I’d write.
Too bad Hungarian is such a dashedly difficult language to learn. Otherwise, I’d possibly make a bid to move there.
” … the West is about to get poorer as governments are forced to cut spending and debase the currency to get out from under domestic debt obligations like pension payments”
I suspect FedGov will continue disbursing pensions and EBT and WIC and all the rest of it, but the “money” won’t buy anything.
“The country will devolve into small parts that work, big parts that don’t work, and everything in-between.”
The country will break apart into at least four independent countries.
I say repudiate our debts. We owe them to thieves that have parasitized our financial system. Of course, we were told by FDR that we would owe them to ourselves, but he was always a liar. I try to find good arguments against doing so and most revolve around the instability it would cause this country. Although, you are not going to get the truth from the same people that benefit from debt slavery. I found this on the Foundation for Economic Education site:
“The bottom line is, repudiation of the federal debt would be fundamentally immoral. It would constitute a dishonest act of the highest order.”
Immoral? You mean more so than pedophilia? Oh, wait. That’s just a lifestyle choice these days. Then the same guy that wrote this ended his essay with:
“But, as the saying goes, every cloud has a silver lining. If the government of the United States repudiated its debt to investors, you can be sure we would have a balanced budget, whether Congress liked it or not. That is because nobody would ever lend the United States another dime!”
Great!!!! Balanced budgets and an inability to borrow money. What’s not to like?
“That is because nobody would ever lend the United States another dime!”
That is the one and only and sufficient reason that I back repudiation. Poisoning the reputations of all future generations of gluttonous, arrogant, election-buying banksters is worth any price.
“Recently” is of course an arbitrary term. To use the USA as a proxy for most nations, which is largely accurate due to its dominate for a very long time: The world has not had circulating gold coins since 1934. Nor silver since 1964. Consider that even for the latter, that only early Boomers could credibly claim to have held silver coins in their hand, as part of normal commerce. “Recent” yes in historical buts, but that’s at least two generations back.
Z is right to note that, in the words of others, what the US’s hegemony especially post- WW II allowed was to effectively export its inflation. Even so, it was not without cost: the Dollar has lost a large fraction of its value. The Dollar has been inconvertible (not gold backed) since 1971. The Dollar’s prima donna position has, however, allowed it to get away with much more inflation (dollar creation) than would have been the case had it not been the reserve currency.
That status probably can’t last forever. Many pessimists have called for its demise for many decades. They have been wrong so far. But some day they will likely be proven right. Maybe it’s started now.
Another thing Z didn’t mention (or did I miss it)? Gold, silver and other valuables have enduring value. In the present world, the USA and the UK are unique in world history: they have not repudiated their currencies for several centuries. In other words, a Dollar or a Pound Sterling from 1798 or perhaps even earlier in UK case, is still legal tender. This is a shorthand for saying that the national governments were continuous. Contrast that with many nations, even ones commonly thought of as “stable”, like those of Europe, that have been through two, three or more currencies (and governments) in the past century alone.
Remember that gold or silver coin that has the ruler’s image on it? The saving grace of precious metals is that the coin still has (more or less) the same value, long after the issuing government has faded into the dustbin of history. In the old days, it was the metal that gave the money its value. At best, the stamped image was a quality control indication. In the fiat money world, it is just the opposite: the physical medium has little to no value, and all the value is the implied credit-worthiness of the issuer.
At the risk of quibbling Ben, I think suspension of convertibility to specie is tantamount to repudiation of the currency.
I’ll quibble here too and point out that there are several websites that will convert your dollars into gold and silver.
one thing missing in the conversation is that kings used to dilute metal based money, too :). there is no easy answer to the problem of efficient commerce, people being the conniving fukkers they are.
Ben: Thank you for making the important point (imho) that “In the old days, it was the metal that gave the money its value. At best, the stamped image was a quality control indication.” I admit to being influenced by my husband, but he considers ‘junk silver’ (i.e. US 90% silver change pre 1964) ridiculously overpriced and a waste of money. His argument is that an ounce of silver is an ounce of silver, and those who will accept it as a store of value in the future will be able to identify such and won’t be inclined to extend any further value to US or other government identifiers.
For those who strenuously disagree (and they are legion), he further notes that a lot of the older coinage is extremely worn and thus now contains varying and uncertain quantities of metal. Then there are those who still pay exorbitant amounts for older or rarer coins – like all ‘collectibles,’ those depend on a functioning Western civilization and stable economy to maintain their value. Heck, at this point China has cornered the world supply of copper – so perhaps it would be more profitable to ‘invest’ in some of that metal – preferably in the form of quality plumbing supplies.
I almost broke my tooth biting into that copper tubing to see if it was real.
The “worn down” aspect of pre-65 silver coinage is accounted for in valuation. It’s minor. The useful aspect of pre-65 coins are the breakdown of silver content to smaller amounts for purchases while still being widely recognized as legitimate.
Silver is now $25 per troy ounce. If the world goes into the toilet, perhaps we have $100 per once silver. You gonna take a one ounce silver “round” and purchase a loaf of bread with it? Take fiat money as “change”? Of course not.
Similarly with gold at perhaps $5k per ounce. If you are stuck with large bars or unbreakable smaller quantities, you will be at the mercy of brokers who will “exchange” your fortune for smaller, and more useful, denominations–at a price. And of course, that’s assuming there is some semblance of a functioning society you can work within. If you are just trying to “get out of Dodge”, you better have the minimal coinage you can bargain with to obtain necessities, because no one will be accepting fiat currency.
Compsci: Some valid points, but there are other alternatives and smaller variants than merely silver rounds. There are also other national coins containing genuine metal – and the valuation of the junk silver is not fully accounted for in its valuation. It also entails an inflated premium because so many people collect it – because it’s what they know. Half of all people who will remain after any collapse will have no memory or knowledge of pre-1964 America and no reason to put any more trust in old American currency than any other metal. It’s simply normalcy bias in coin form.
Yes, junk silver has taken quite a leap in premium. I suspect because of who’s buying and in such small quantities. No argument there.
When you buy coinage outside of wide recognition, the premium over spot (melt) does go down, but so does the ability to exchange such outside of experienced folks and more savvy organizations. This may or may not be of concern.
Point is, why do you own PM? Protect your wealth outside of fiat currency? Or as backup–as in contingency/emergency? You can buy stocks that hold PM. Why not do that? Well, the answer should be obvious if you believe one way or the other. I simply plan for the worse case. I don’t fault your efforts should your worse case expectations differ from mine.
Agree strongly with Compsci, dimes are already a recognized currency in useful amounts.
I have a very small bag for travel, along with an envelope of a couple thou dollars cash. I really, really need to get to the coin gallery to buy some bags, and fook the price. I’m gonna start tapping the credit cards for ATM cash too, in case the damm power or ATM network goes out.
Lead? Guns are the FIRST THING thieves steal. They’ll leave even the jewelry, for guns.
PS- not ready to get food in the ground and fight off the squirrels,, so buying 2 years worth of canned, etc.
And seeds. A frickin’ crate of seeds. And more 2500 gallon tanks of water, to be used as cisterns later.
No good in CA, though. The canal next to my house, literally a piece of the property, has been dry for two years. They’ve stolen all our water.
The question for me is, where in the country will I be when the balloon goes up?
” … he considers ‘junk silver’ (i.e. US 90% silver change pre 1964) ridiculously overpriced and a waste of money.”
And once again, he and I agree!
Silver rounds and coins have the salient info stamped on them; the junk silver does not.
Also, imagine trying to pay in silver to some Shaniqua cashier. Kids have NO idea about money or silver and gold, etc.
But there will be black markets everywhere. I expect most local farmers markets to become barter markets or locations where one may purchase things for real money.
Infant: I understand all my husband’s points, and since he’s the working/earning member of the family I defer to him on this issue (as well as others). However, I did finally talk him into buying a small quantity of 40% silver Kennedy half dollars (1965-1970) – for those times when Alzaebo believes a worn dime will be needed. These are in much better condition and significantly cheaper than the older junk silver – just to have something of smaller value to begin with.
“Bretton Woods III, as some are calling it, will be a new set of currency arrangements whereby money is based on its purchasing power for the agreed upon basket of products.” – Exactly right. The most obvious solution to the current problems.
All true and overdue, but muddle-through will not do.
The USA is in decline because a half century of affluence has made us soft and lazy. Our parasites outnumber our productive, and too many of us whine rather rolling up our sleeves. We are also severely mentally ill because we now believe there are 37 genders and men should be allowed to compete in women’s sports. It’s easy to pass this malady off as the machinations of our “leaders”, but a sane people would have rid themselves of these disease cells long ago. We vote for corrupt and incompetent politicians because they promise endless government gravy. And our police protect them because habit and paycheck.
And nothing will change until the environment changes, hence collapse is the cure. Only within the fog chaos can remedy assert itself successfully. There is a role for the protesters and rioters, keep those LEOs busy, busy, busy. Thereafter, the rise of the antibodies is remedy in its most efficacious form.
> We are also severely mentally ill because we now believe there are 37 genders and men should be allowed to compete in women’s sports.
No, we are severely mentally ill because we believe the word “gender” applies to people and that women should have sports. The rot is deeper than you think.
fully agree. that’s why efforts to build up a fit group (the DR) are doomed. there simply are too many corrupted individuals to build a healthy society. any such effort would be quickly over run with parasites, or simply shut down by the govt. have to just let “Winter” do its work, and wait them out as best one can.
karl: Yes and no. While I’d agree there is no realistic way to found any sort of White homeland in the near-term future, and the better prepared and stronger minded can only ‘wait it out’ as best as possible, there is still a role for community over the ‘lone wolf’ mentality. Nothing overt or official, but finding and joining with like-minded individuals. Forming communities or loose alliances in meat space and/or planning for when the crisis hits and things break down. Identifying those who genuinely share one’s views and goals now, while the means of easier communication and travel exist, is far preferable to later when they won’t be there.
Please allow me to dispel a popular myth. All wolves live and hunt in packs. Wolves only wander off on their own when they’re about to die. Inuit (eskimos) do this too, BTW. The Stasi, and its ilk, are well prepared to take on citizen militias that would aspire to engage in a revolution. And most of these brave souls will likely fall victim to entrapment before ever doing anything impactful. See Michigan “kidnappers” and Jan 6th protesters as an example. Both were heavy-handed entrapment OPs incited and conducted by the Stasi. There is better way, and for the umpteenth time, it’s not Rambo or Jason Bourne. It’s the average Joe rising to the occasion when opportunity knocks. If you keep everything solely within the confines of your cranium, you cannot be betrayed.
” … or planning for when the crisis hits and things break down.”
I think it’s a mistake to expect “a” breakdown. We are going through a “long emergency.” It’s a slow burn, and it’s going to play out over a long time, and it started some time ago.
But there may come a time when almost nothing functions.
Not wrong but efficiency creates parasites.
People need steady employment and frankly if there are many people living in cities, a lot of money just to live and have a family.
Efficiency as low as 60’s tech lowers wages, no money no babies.
And no people won’t sacrifice for it in most cases, people smart enough and wired the right way to be useful to a modern economy are prone to smaller families
Sure an economy can be propped up by bringing in people from the Hinterlands (aka immigrants) its destructive.
Fundamentally in modernity too much of a lopsided distribution occurs just as Marxian economics predicted (good diagnostics, evil and stupid solutions) they system implodes and self corrects.
Modern secular society dies off, the remaining people are very religious and/or very fertile which is good since it compensates for higher mortality.
Amish Paradise awaits.
Charles Mackay’s 1855 book
“MEMOIRS OF EXTRAORDINARY POPULAR DELUSIONS AND THE Madness of Crowds”
Is now available for free on Project Gutenberg (Not even Disney has been able to bribe the political filth enough to get copyright to extend to 170 years.)
https://www.gutenberg.org/files/24518/24518-h/24518-h.htm
I’ve wondered why they keep printing dollars. Using the world’s willingness to purchase US sovereign debt to stave off economic collapse might make sense in the short term, but we’ve been dependent on it since at least ‘08.
There have to be big brains who know that’s unsustainable. Maybe the engine is running away, but I suspect the decision has been made to kill the dollar and replace it with a digital fed currency, or something like that. Spend your dollars while they still have value, hoover up assets that will be revalued in the new currency, rub hands furiously.
I’m not sure that will work. Money has two components: its hard value and trust— like the king who makes sure his coin isn’t debased. Will the world still trust the US enough to accept its currency?
Best laid plans of mice and men! Develop a household economy, be prepared to produce your basic needs.
The only solution to avoid taking a long bath would be to sell those assets to foreigners for their currency, but that would be treason and the end of the US. If that’s also part of the plan, it’s another reason to doubt its success.
Unless America is already dead in Americans’ hearts, which, I’m sad to say, wouldn’t surprise me.
“Using the world’s willingness to purchase US sovereign debt to stave off economic collapse might make sense in the short term, but we’ve been dependent on it since at least ‘08.”
Really, it’s just been to stave off the hangings.
The purpose of public square hanging was to send a message to the common folk that rules had consequences, but that message had no real impact on the power players in society because the rules did not apply to them. If you want to get the attention of the latter, anonymous remedy is far more effective. No one can remain sane for very long if they must be constantly looking over their shoulder.
In that situation, the public hanging then has a secondary purpose. As a clear, final statement that they are NO LONGER the power players.
Of course, first you must be able to take their power, and that is the tricky part. But history shows us that it is often easier than one would think.
seems to me that in a world moving away from finance, towards real asset based trade, digital money is dead on arrival. in that world, no one is going to take bitcoin for a barrel of oil, or a bushel of wheat.
Makes you wonder why the money men are driving it. If they fancy themselves neo-feudal lords, do they realize the old lords were as tied to the land as the serfs? Those families didn’t simply buy their way into the game. Can bankers farm and defend territory? They seem to be attempting reverse capitalism, if that’s possible lol. Totally stupid imo.
Remember Yang pushing UBI? I suspect that would be the aim of a digital currency. Good slave tokens for the peasants. Right.
But again, post covid I’m no longer certain the public has a shred of dignity left, so who knows, they might pull it off.
Retarded elites and their livestock. God help us.
“Yang pushing UBI? I suspect that would be the aim of a digital currency.”
Yang pushed UBI, so has Charles Murray, but neither promoted it as a freebie, or a bribe, or sustenance for slaves. It was promoted as an end to government welfare–and of course, the power of pol’s to buy the people’s vote.
In other words, the plan was to do away with all government payment/subsidies, except this one. After which you are on your own. Want to go to college, pay for it. Want health insurance, pay for it. Want to retire with dignity, pay for it. Baby moma needs more welfare, no you don’t.
Although I don’t particularly see this working and such has been tested and found wanting in other countries, the concept–weaning the populous off of the government teat–seems to have been lost through duplicitous depiction of the idea.
Honestly, I hadn’t heard that. I heard giving everybody $x and I thought, well, thats $x less purchasing power, figured it was pointless, and didn’t think much else about it.
Paintersforms, I’m sure there are UBI ideas floating around that just make this another give away. But Murray wrote a book on his idea (In our Hands) about 15 years ago and I listened to Yang expound on his UBI idea during his Presidential run.
Murray and Yang both promoted the idea of UBI–and explained what “programs” would be dissolved to pay for the total estimated cost of the program. SSI–gone, Fed student Loans–gone, etc. Even Fed Farm subsidies and the like–gone. Murray had better figures than Yang (IMO) since toward the end of his presentation, Yang, began to toss in magic numbers like savings from administrative costs, and other BS.
In short, both men recognized the insanity of the current political situation in which people were being robbed of their money and then bribed by the government giving it back to them with strings. There was a recognition that this perversion had to be stopped, but like opioid addiction, “cold turkey” was not the answer. UBI (economic methadone) was their solution.
I can see the logic of that, but I don’t see how it would be workable for two reasons:
Getting rid of subsidies is nigh impossible, of course, but the way you describe it, UBI sounds like the New Deal in reverse, i.e., a little bit of austerity. Maybe people could be convinced to go along if the alternative is collapse, a big maybe.
And of course, you’re still left with the problem that nobody is making the money. You own fewer things that you didn’t earn, and you’re still pretty unhappy.
Idk, it goes against my instincts, but I see your point. It’s sort of splitting the difference. Very hard sell, though.
Overlooked is the not-so-noble and all too easily overlooked hidden agenda of governments: Divide and Conquer. One version of that is being in charge of handing out the money. You do it to favored groups. Create factions and pit them against one another. This is probably inevitable in most political systems. Surely it is normal in a democracy. The last thing a government wants is the money distributed (relatively) impartially with (relatively) no strings attached. They’d be out of a job.
“Can bankers farm and defend territory?”
Can they bank without electricity?
“Remember Yang pushing UBI? I suspect that would be the aim of a digital currency. Good slave tokens for the peasants.”
ELECTRICITY. And *unfailing* and *universal* supply of ELECTRITICY.
Otherwise … nuttin’.
Yuan : renminbi
Internal domestic money for the serfs- Fedcoin.
External money for trade balances- backed by the serf’s assets, such as MBS tranches (mortgage backed securities).
We serfs can’t buy our own MBS tranches, only the institutionals can.
We can, however, sell our girls wombs in surrogacy baby farms to supply rich homosexuals, in prisons protected by Azov nazi gangs!
“seems to me that in a world moving away from finance, towards real asset based trade, digital money is dead on arrival.”
ELECTRICITY.
They keep printing dollars because it’s a democracy, and very few want austerity and financial discipline. It has never been a popular platform, and never will be.
That goes to character then. Might also point to democracy being the government of the dissolute.
I’m not gonna blame the doggy for eating what’s in his bowl.
Except when he’s eating what’s in your bowl, I hope 🙂
To an extent, but the common political promise is that government debt is an investment that taxes on future prosperity will pay for debts incurred today. It’s a lie, but politicians make it sound extremely plausible, so stupid people can hardly be blamed for believing it.
It seemed to work for a while, too, but it’s become such a burden on productivity people aren’t even reproducing anymore.
To get religious about it, people used to understand debt and sin are synonymous. Hopefully they remember.
Democracy is the political system in which the unorganized majority is ruled over by a well-organized minority.
That’s all it is or ever was.
“I suspect the decision has been made to kill the dollar and replace it with a digital fed currency … .”
The legislation was introduced last month.
But any digital “currency” depends 100% on an unfailing and universal supply of electricity AND the unfailing functioning of the internet.
So local barter economies are more likely than acceptance of a digital “currency.”
The power grid cannot be defended. If 40 or 50 determined men decide that there will not be a digital “Currency,” then there will not be a digital “currency.”
But what constitutes a country and what might compel current countries (national states within fixed geographic borders) to continue to exist?
Technology might achieve the macroeconomist’s dream of being able, at every time, t sub 1… t sub i, precisely to know the inventory of the world’s supply, s sub1… s sub i, and the need for these products, on the basis of the moment’s ever changing master plan, and so be able to price each product, p sub 1… p sub i, in terms of a global, digitized currency that continually fluctuates in value with prices likewise continually fluctuating, the price based on real suply. If a global mercenary could enforce contractual obligations, demand could be continually adjusted on the basis of global allocation with one’s place on line determined by one’s social credit score.
There’d still be the time value of money and a related carry trade but no arbitraging a speculative futures market. A scenario like this supposes we’ll have become controlled bots in a metaverse utopia. Might not be an unreasonable supposition.
“Might not be an unreasonable supposition.”
Not if you postulate an unfailing supply of electricity and the unfailing functioning of the internet.
But what reason is there to postulate either of those, let alone both?
It amazes me how people can talk so easily about total collapse, etc., and then assume–blithely–that everything will continue to function not only normally but also universally *after* this “total collapse.”
Back in the late 90s, early 00’s I used to regularly listen to the late Chuck Harder’s “For the people” radio show, which was only on smaller mom and pop radio stations because the big corporations didn’t like his message.
A big focus of his show was the importance of manufacturing (especially “value-added”) to a healthy economy, which along with mining and agriculture formed a three-legged stool, and pulling one leg out would collapse the economy eventually.
Harder wasn’t any kind of intellectual, but was one of those common sense guys who spoke to regular everyday hard-working Americans. He was also increasingly a sad fellow, heartbroken over what his country was becoming, while most in the corporate media saw only a bright future for the USA.
The transition from the Dollar to whatever comes next for international reserves will take a long time. Why? Because the power of the Dollar is rooted in the fact that the world’s Liabilities, not just its reserves, are denominated in Dollars.
The Eurodollar market alone is probably ~$20Trillion. Repaying all this would create a pretty stiff demand for dollars. And what would investors accept as an alternative? It’s not clear.
Meanwhile, China has long kept strategic reserves of commodities – they even have a Strategic Pork Reserve! I doubt they have much more marginal demand for reserve commodities beyond what they already store today. Meanwhile, the Chinese have an FX policy of a “managed peg” against the dollar. Are they going to change it? It’s complicated for them; reams have been written on this subject.
But indeed, economics happens at the margins. The poor US policies of recent years will blunt demand for dollars going forward. Like everything else, the agony will likely be protracted.
The feds have a printing press, but the states and municipalities do not. It tends to go away when times are “good” and the stock market is up, but when the stock markets go down, the insolvency of at least some of the states rears its ugly head. California is pretty bad and has underfunded its pension system for decades. Every time someone retires and they are replaced, they are in effect hiring a new additional person because the retiring person has their salary paid for life. There is all kinds of tomfoolery like this going on across all the states. California and Illinois might be the worst, but they are not the only. All of these formerly great cities of the nation have similar problems and are run by buffoons.
The old “printing press” (or its modernized equivalents) arguments have their merits but they often leave unstated the critical premise: Will the creditor continue to accept the fiat (printing press) money? Sure, up to a point, until they no longer will. To my knowledge, there are no examples in history where a fiat currency did not eventually become worthless, usually as a result of any or all of the following: hyper-inflation, war, revolution, national bankruptcy. The Dollar isn’t there yet but I see no reason why we will escape what History dictates awaits us.
The ability to not accept USD payments is not an issue inside the US. All contracts in the US are based on USD. The pension contracts are to receive USDs. Also, any debt denominated in USD outside of the US would probably also have to be settled in Dollars.
The previous fiat failures were all inside of a larger world order where there was hard money. There is no hard money in any recognized nation in the world. Pretty much the entire world is using fiat currency. The USD has lost probably north of 60% of its value between 1972 and today. But the Dollar didn’t fall in a world of hard money, it fell in a world of fiat money which also fell.
The real danger is that the treasury has some bond offerings and there are no takers. But as was pointed out in another thread, there is a lot of dollar denominated debt out there and that keeps the demand for Dollars relatively high. I just don’t buy that anyone really knows how or why this system will break, if indeed it does break.
The Dollars are in foreign reserves of countries because of the need to buy oil. Without the need for those dollars countries will spend them in a chain of transactions that will end up with those dollars back in the US. A greater number of dollars floating around the US economy chasing what few goods it produces is called inflation.
If India pays for Saudi Oil in Rupees, Saudi doesn’t have the dollars to buy T-Notes. Fewer buyers means lower prices means higher interest rates.
The solution was fertility. The old Ponzi scheme. Now they tell young people to be queer and get vaxxed. Something rotten in Denmark.
That’s a disconnect between the elite’s virtue signalling and reality, Nothing new.
Also the US is grossly overcrowded anyway. The decline in the water table out West (as in a few decades, zero water or rain, yes zero) is a huge issue. Way too many people
If we could manage immigration and fertility we could manage the problem bu we can’t which suggest soon after a mass migration of the most heavily armed population on Earth looking for water, food and all that.
Sea peoples only on land. God help us all.
“And what would investors accept as an alternative?”
Historically, hard metals have been required in lieu of debased currencies. Direct barter has also been used, though not as frequently. It also doesn’t take loads of time to work this out.
So tell me how a $20T Eurodollar market gets replaced quickly? And that’s just the beginning. There’s Trillions of derivatives denominated in dollars. I could go on….
As you said, it’s at the margins that count.
I think of it like a road system. At the moment, the US controls the freeways AND there are no backroads so only is it far more convenient to use the dollars, there’s literally no alternative.
What Russia, China, India and others are trying to do is create some dirt roads outside of the US freeway system. Sure, the roads are bumpy, slow and sometimes blocked by flooding and fallen trees, but you can get from point A to point B without taking the freeway.
The backroads system ain’t great and you’ll probably use the freeway most of the time, but it’s nice to have an alternative. What’s more, maybe over time, some of the backroads get paved. Maybe a few more are built. Etc.
In time, the backroads are pretty good. And given the fact that they don’t have some dickhead US sheriff stopping people for no reason, they become more and more popular.
But the whole process takes time. A lot of time.
I agree. And in time those roads become widened and well paved. What will accelerate it us the U.S> Congress busting the deal. The world didn’t mind U.S. deficit spending, but not THESE deficits since 2000. They don’t mind marginal inflation because their own currencies are experiencing the same. It’s when they look around and find they’re holding crapola is when bad things start happening. Maybe I shouldn’t say the Congress, the American people themselves have never had higher expectations of government largesse.
Citizen: Intriguing comparison. As you and others note, the process will take time and will not be without pain for many, not just increasingly beleaguered heritage Americans.
No one really knows the size of the Eurodollar market, not even the Fed. It’s hard to quantify given the opaque financial instruments over the last 50 years. You do have to take into account that each derivatives transaction has a counter-party, so you can’t double count the same underlying asset…or should I say “asset.” This is the biggest danger of a collapsing reserve currency. All those euro-dollars will be rapidly transmitted state-side, amplifying the downward currency move. It’s anyone’s guess just how amplified that will be. We could see a fall in the currency that looks like the gas gauge on a ’68 Camaro (you can actually see the needle moving). Waking up in a world where everyone on earth is trying to minimize their dollar holdings and just keep enough for efficient trade is a huge downside risk.
What got me was a Russian commenter who said, “when we went to bed, that 2000 rubles in our bank would buy a small car.
When we woke up in the morning, that 2000 rubles would buy… a t-shirt.”
That plus the millions of Russian expats who woke up to find their bank accounts zero’d out, in a foreign country with no money, with worthless rubles.
How you gonna eat when a loaf of bread is $500?
Umm, barter means the end of pensions.
“Umm, barter means the end of pensions.”
Why?
How likely is it that FedGov will tell the people the truth and just stop disbursing funds?
Not at all. They would be torn to pieces in the streets. THAT is what the Great Reset is intended to avoid.
They’ll keep paying, but the money will be worthless.
Russia backed the ruble at 5k per gram of gold. Assuming reserve numbers are true that’s ten trillion rubles.
Other nations could do the same which would fix the amount of specie. If the population were growing , it could present a liquidity issues but fertility is low.
If there is too much currency/money just trim a digit or two off prices, debts and the like.
Say minimum wage is $10 and a loaf of bread $2 it becomes $1 wage, 20 cents bread.
Its pretty basic stuff for stable currencies but it requires somewhat honest capable government to work well which we don’t have,
” … but it requires somewhat honest capable government … .”
What it requires is an unfailing and *universal* supply of electricity and unfailing and universal functioning of the internet.
Since apparently the last comment wasn’t clear enough, lenders require repayment in metals (or literally anything else) instead of dollars. This is how lenders have settled accounts with a government that’s debased it’s currency. They tell them that scrip isn’t accepted and that they need to hand over x amount of bouillon.
“Direct barter has also been used, though not as frequently. It also doesn’t take loads of time to work this out.”
Yay! A commonsensical comment!
Agree. 75% of the world’s debt is in dollars. Something 80% of the trade is done in dollars. It’s going to take a long time to unwind from the dollar.
However, the world doesn’t need to replace the dollar to dramatically reduce US power. It just needs enough alternative routes to allow a country to continue trading at a reasonable level to make sanctions not worth the effort.
Regardless, the process of creating a multi-currency world was dramatically accelerated by the seizing of Russia’s CB assets. What would have taken a few decades will likely be condensed into ten or 15 years.
Coupled with all of Our Leaders irrational behaviors, and beyond their pirating of the CB holdings, I think that a shorter timeline is actually quite possible. If Our Leaders functionally, not even actually, default on the US debt through the continuance or even an acceleration of stupid shit, I predict that that would be the only rational course for the rest of the world (maybe not the EU, ’cause they are arguably stupider, as they are standing steadfast by the gunwale of their ship of state, assiduously lashing an anvil around their necks, ever ready to leap overboard on command of AINO).
Thanks, Citizen.
That’s what I want to know- how long have we got?
The Russian Balance of payments was positive $120 Billion for 2021.
In other words, the world wanted that amount of Russian goods and services more than Russia needed to import.
https://think.ing.com/articles/russian-balance-of-payments-is-solid-but-not-bullet-proof/
The US B of P was about $200 billion negative per quarter for 2021.
https://apps.bea.gov/iTable/iTable.cfm?reqid=62&step=2&isuri=1&6210=1#reqid=62&step=2&isuri=1&6210=1
The idiocy of the USA and its strong-armed allies in seizing Russian assets just boggles my mind. This is confiscation on a scale never seen except in the old days, after a formal declaration of war. I admit I don’t follow the news closely, but am I mistaken under the assumption that Russia has not attacked the USA, nor any nation except Ukraine, which isn’t even a NATO or other nation we have a treaty with? Does the US and its cronies even have any legal basis under law to take these actions?
At the rate things are going, all the US is going to have laid claim to are a few hundred billions of confiscated deposits, some worthless ADR (stock shares) and several quite impressive yachts. I hope it was worth it.
“Meanwhile, China has long kept strategic reserves of commodities … .”
China is–and has been for years–a net importer of food.
Last year, heavy rains owing to the current Grand Solar Minimum destroyed 50% of China’s food crop, and the year before that, rains destroyed about 30% of their food crops.
Has everybody forgotten the Three Gorges Dam? The Grand Solar Minimum? That China is a net importer of food and that the distribution system and the payments system is being deliberately destroyed? And that the (((neocons))) are hell-bent on a war with Russia? Etc., Etc., etc.
“Thirty years after the Cold War the world is about to start healing and return to something close to normal.”
I truly hope and pray that you are right. I strongly suspect that this is all part of the great reset. There is no way the US govt. could not have seen that their actions would lead to accelerating the dollars demise as the reserve currency. To my mind it has to be deliberate.
So if it is intentional it will not lead to healing and a return to normal. The digital currency is the key to their vision of prison planet and I think that is a more likely outcome. I am a bit pessimistic and I am likely wrong but I have a hard time believing that this is going to turn out well for humanity.
the people in charge are completely detached (and temporarily isolated from) reality. inexplicable actions look deliberate (in their destructiveness) because you are interpreting these people through the prism of reality. had to down vote you for refusing to accept this basic fact.
Mountain Rat, have you ever encountered a *true* dark triad person in real life? I’m not talking about some grandiose asshole who is full of himself, but a full-on, clinical narcissist/sociopath/psychopath?
These “people” lose the ability to envision *any* negative consequence for their actions. It’s truly eery. Our prisons are filled with otherwise clever individuals who never even considered the possibility that they might get caught.
These are the kind of criminals that are ruling DC these days.
Ted Bundys with bigger brains and (slightly) lower time preference basically
I scarcely know the psychology, but can claim to having known at least casually, two candidates. One did a few years in prison for forging checks of elderly she befriended. A more recent business acquaintance: seemed a good worker, cheerful and efficient, caught embezzling close to $2 million from the business, now looking at several decades in prison.
So start arresting ’em, von Hungus. Or maybe the Chinese generals of the Red Dawn will, instead of making deals with them?
You are absolutely right to fear that an intentional destruction of the West’s economy could be part of the Great Reset. If you are right about that, our only chance is that the genocidals have miscalculated their ability to control us as the economy craters and that it will instead lead to something like revolution. Let’s hope we’ll end up looking smarter than Schwab and Gates.
I couldn’t care less how it turns out for “humanity.” I get so sick of people rambling on about “humanity”and “changing” “the world” The world and humanity ain’t my problem. Nuclear bombs dropped on all the major cities would indeed “change” “the world”
We have to stop thinking about “humanity” or “mankind” or “the world” and for god’s sakes “Change”
The urge to save humanity is always a false face for the urge to rule it.
“The digital currency is the key to their vision of prison planet … .”
No, an unfailing and universal supply of electricity is the key to *everything.*
Without both, there can be no digital “currency.” And it’s not a currency anywway, any more than the “vaccines” were vaccines.
It would be a credit at the company store, that’s all
But no electricity = no digital currency. In fact, no modern world.
The US power grid is indefensible. Period.
What was it that R. E. Lee once wrote…?
“If the present government in Washington prevails, it is certain to become tyrannical at home and aggressive abroad.”
That is the very essence of the word “prescient”. And now reality once more prevails.
“What this means in the short run is that the West is about to get poorer as governments are forced to cut spending and debase the currency to get out from under domestic debt obligations like pension payments.”
Pension payments come from TAXES. In the richest country in world history, pension payments are a national subsidy to (a) limit savings so debt-fueled consumer spending will keep the economy rolling and (b) encourage real estate mortgage speculation, more debt, as a retirement investment.
The most lucrative pensions are for public employees, which makes them the most loyal cadre of voters for big government. The Supreme Court forbids the modification of existing public employee pension programs.
“forbids the modification of existing public employee pension programs.” so if inflation erodes the value/cost of these pensions? they are not going to be honored because the money isn’t there, and never will be.
At some point the court will simply say the pension is not a contract and that problem is fixed. Again, words on a piece of paper in a museum mean nothing.
Yep. The 14th Amendment says the govt can’t discriminate on the basis of race. Yet, the Supreme Court via O’Connor overrode the Constitution due to a “compelling government interest.”
O’Connor didn’t even try to pretend that college affirmative action – supported by govt loans – was constitutional. She just said too bad.
If the SC can throw aside the most cherished right in the Woke ideology, it surely can allow some pension rules to get changed.
Conservatard Extraordinaire Gorsuch made O’Connor look like a piker when he announced that although he had absolutely no doubt the 1964 Civil Rights Act was not meant to include trannies, tough, I’m doing it. All pretense was dropped at that point.
Anyone who thinks the federal courts are not at least as corrupt as the legislative and executive branches is delusional at this point. As the United States becomes more and more of a low trust society, court rulings will be routinely ignored as they should be.
I can’t recall the author, but he was commenting upon the Roman Empire as its influence ebbed: A consul in some remote province might continue to issue edicts in accordance with what Roman law required. If he were lucky, the local populace might simply ignore him.
“Pension funds come from taxes.”
Really? Which ones?
And they have to get 8% p.a. return or they go under. That’s what the Great Reset is meant to hide.
“The Supreme Court forbids the modification of existing public employee pension programs.”
This is not correct.
States, however, can do what they want. For example, the Illinois Supreme Court has interpreted the Illinois state constitution to basically take the stance you note.
Btw, if anyone wants to get an overview of the initial outline of a Bretton Woods III system, here’s Zoltan Pozar’s take on the subject. It’s worth a read.
https://plus2.credit-suisse.com/shorturlpdf.html?v=51io-WTBd-V
Citizen: Thanks – saw a headline about that at Zerohedge and wanted to read it, but it was behind a paywall.
Z mentions somewhere below that Jim Rickards wrote a book about all of this a decade or so ago. I haven’t read the book, but I’ll read other stuff from Rickards discussing all of this. My point is that the problelms with the system have been known for awhile.
Pozsar is interesting because he’s coming from the inside. Works for Credit Suisse. Used to work for the fed. When insiders start talking about changing the system, you can bet that something has changed.
Z, I think you are referring to the Nietzschean philosophical concept of the Apollonian vs. the Dionysian, which is discussed here…
https://en.wikipedia.org/wiki/Apollonian_and_Dionysian
I thought he was referring to Jews controlling the money.
As the resident Nietzsche shill here, I must confess I don’t know much about the Apollo and Dionysus distinction, beyond that it deals with Classical Greek tragedy and drama. Apollo was the studious one while Dionysus started fights and was always drunk on wine, as I understand it. I’ll leave the finer points to scholars.
I do think Vegetius is correct in saying that the reference is to the Jews.
I have just begun the book “The Jewish Century” and at the very beginning the author specifically invokes the image of Hermes (Mercury), the god of messengers, merchants, travelers and such, as descriptive of the mobile culture the Jews as well as others (Gypsies, etc.)
Negative. I am referring to this.
Wow! Thanks for providing this new (for me) information. I hope everyone gets around to reading it.
i read the wikipedia article, and it whet my appetite for a fuller version (if not the original source; russian writing being kind of a chore in my experience).
A very quick read,, too-
I see Mercurian as a low-cost, low energy strategy.
Cultivating cheaters gets faster results, true, and it also ends up destroying society, every single time.
I don’t know if Slezkine is familiar with the works of H.G. Wells. Perhaps it would not have been as original to refer to Eloi and Morlocks.
(That wiki explains the use of Mercurian / Apollonian in the apollonian transmission dot com, a exploration of j**ish esoteric mysticism and the Bible as religio-political propaganda, so an extra thanks to the Z.
The Pentatuch was probably repurposed / written in reaction to the Oreanna Linda, the Aryan Bible, which preceded it by sixty to an hundred years.)
“The Jewish Century” is a great read. I’ve also heard the division as between Thalassocratic (people attached to water, by which is meant international trade and having an international outlook) and Tellucratic (tied to the land, both the literal ground which grows the crops, and the people). Alexander Dugin (who’s probably even more verboten now than before) used Carl Schmitt’s formulation of the concept to highlight the struggle between the Atlanticists and the Eurasians. Schmitt, in his “political theology” framework used Leviathan versus Behemoth to make the same point. The best way to look at what’s happening with the U.S. and Russia now is to see the US as a great white shark that hates the bear so much it’s flopped up onto the shore to try to do battle completely outside its element. We’re dying because we’re nuts. All the bear has to do is stand back and watch.
My own pet theory is a herdsman vs. farmer mentality. Herdsmen view people as sheep to be guided and corralled. Farmers view humans as resources to be developed and grown. The animal husbandry revolution yielded one mindset and the agricultural revolution yielded another.
Excellent stuff, both Junger and Iron. Adaptations to the environment.
Very much appreciated.
All the great, knowledgeable comments today. You volks are the best!
A maxim I really believe in is ‘never let macro (national/societal) hopes get in the way of micro (personal life level) preparations.’ Based on that, is it time to buy physical gold or other precious metals (which, silver, platinum??) or real estate? If money’s about to become TP, and accounts can be frozen on a whim, where to store value?? Thoughts on this appreciated.
Precious metals and farmland.
you’re not going to find any bargains in either of those. raw land is going to take investment to make it usable. at a time of high building costs (sand long build times). and if your PM bet craps out (gold takes wild swings in price, decade to decade) you will take a bath. something like a portable saw mill, or small engine repair shop, might be a better play than PMs, at this point. just my $0.02.
Actually, blue chip stocks might be the “safest”, most readily available and advantageous place- although nothing is really safe, anymore.
Moran’s a medico, he won’t ever need to learn small engine repair. He’ll always be in demand.
Land? So true, it’s a big investment in labor, time, and cost.
I see it only as a place to grow your own food or to sell to restaurants, or to buy in the 1990s and flip now to Blackrock developers.
Time we ain’t got much of, when the fertilizer stocks run out next year.
I found a wonderful manual on Gab, for going full prepper on a penny budget, using scrap materials.
Will find the link to the ad. $37, print and digital!
As has been mentioned, the dollar still has a lot of gas left in it, if for no other reason than the fact that it’s apparent weakness is due to governmental incompetence not and systemic economic issue. Witness Japan wrestling with the Yen: there is no lake of oil they can tap, or storehouse of mining that can be opened up to level the playing field. The more the Euro and the Yen struggle the better it will be for the dollar, even with all it’s issues (of which there are many).
Yeah, it seems the dollar might live to fight another day because there are no really good alternatives. A basket or a gold/manufactured goods backed Chinese yuan seem the only possibilities for at least another 5 years.
I read somewhere that if your currency is the global reserve currency you will almost automatically have a trade deficit. I don’t think the Chinese want that, because they want manufacture at home, for both military potential reasons and for full employment so ordinary Chinese don’t have time to sit around and discuss politics while buying cheap Indian and Vietnamese products.
Triffin Paradox. Much has been written on this topic.
I learn stuff here. Thnx
I tend to agree. America has immense natural resources. What it lacks is competent leadership. On the other hand, countries have gone generations without competent leadership. The value of a currency is rooted in that competence or lack thereof.
The main thing holding up the dollar is the lack of an alternative. The Euro is as fake as Europe. The Russian play to link the ruble to a basket of commodities is the first real threat. China and India see this, which is why they are backing Russia right now.
AINO does have immense natural resources. However, the Beltway crowd seems to have an immense aversion to their utilization (climate change and…stuff), plus competent leadership is no where to be found. Using our natural resources would be the…natural thing to do, but all things unnatural appear to be the path our betters have opted for.
Should it hold together, the long term implications of BRIC teamwork (if ‘B’ still matters) will be significant / interesting – but in any case do not bode well for AINO.
The Beltway crowd are averse to utilizing AINO’s natural resources because there are far too few skimming opportunities compared to wild schemes like their LNG plan for Europe.
Good point. For all the flaws of the issuing governments, it’s worth noting that the Dollar or the Euro are the preferred (major) safe-haven currencies in the world. This has been true for many decades, not solely for “legitimate” foreign wealth or “flight capital” (e.g. stored in financial institutions or otherwise invested in perceived safe nations) but just as much as for black market holdings (usually in cash) either for illegal activity or in backwards places where the official currency is worthless or even non-existent.
It’s a sad commentary that as screwed up as our “good” nations are, they are the “best” which is just another way of saying the “least worst” of the alternatives.
To be sure, what is the safe haven can change. As recent events have shown, the sun may be setting on the U.S. and/or the Dollar hegemony.
Sounds like the “Milkshake” theory.
As other currencies falter, the dollar rises … for a time. Then, the dollar is the final fiat to fall in an awesome supernova.
Dollar Milkshake theory for newcomers:
https://youtu.be/PWVRWUkm54M
Pay the mortgage with retirement FRNs or let it ride?
It’s a tough call. If your retirement funds are under your control then in theory you can invest the proceeds to hedge against inflation or other threats. Especially in the current environment, I would say keep the debt (mortgage) as its interest rate is likely far below the current inflation rate (7%, 10%, does anyone really know?) I don’t have a mortgage, but I do have some student loans, and I’m in no hurry to pay them down.
In an era of accelerating inflation, the rational course of action is to buy real goods and services, up to the limits of what one can use/store, minimize cash held at poor or no interest rates and (perhaps, perhaps) take on more debt at interest rates below likely inflation rates. Probably credit cards don’t yet qualify 🙂
Usually, it is recommended to keep some liquid assets (cash) on hand for unexpected needs. What amount or percentage is optimal is for you to determine.
pay the mortgage (in full). you can always take the money back out later. if you keep it in a retirement fund, and the latter is seized or rendered valueless, you have neither.
Depends on how much capital you want to tie up in your house now versus later and how much is left on the mortgage.
Personally, I wouldn’t pay off the note if it left me with a few hundred in liquid cash.
The reason is that we are still at a point where that cash can buy a lot of hard assets like storable food, water collection systems, off-grid power solutions, non-perishable goods like TP, metals, tools, ammo, future barter items like lighters, booze, and chocolate, etc.
This is a good point. While counter-intuitive based on the current inflationary cycle, there is likely to be a deflationary period after the collapse and before the dollar becomes totally worthless. It’s a good bet skilled people are trying to get a handle on how long that will be true.
Wild Geese: This. Mortgage must continue to be paid (as well as car loan and phone bill) to continue to function at present, but it does not need to be paid off. Not necessarily wise to take on additional debt at present (ymmv) but neither is it urgent to pay off existing debt at the expense of purchasing tangible assets.
Personally, I think anyone working himself to the bone to send his children to college today is wasting his time. Yes, education is valuable, but you’re not going to get it at almost any current ‘institute of higher education.” You’re also betting on life continuing essentially unchanged over the next decade or so. I wouldn’t take that bet. Stock up on books on practical subjects as well as scientific. Wish I better understood the generation of electricity and the basics of the internal combustion engine.
Jack-
Well, times are certainly tough, but the US is still in much better economic and material shape than the Third World country I spent almost 5 years in when the world economy was better.
3g4me-
Totally agree about college. At this time, our people are far better off in and around the trades and the oil patch. The chances of being canceled or off-shored in those careers is tiny.
Totally agree about books. We can’t count on having access to anything online, or even a functional offline e-reader going forward. I’m trying to assemble a small, worthwhile library of books on gardening, canning, country skills, outdoor skills, etc.
Moran: Hedge your bets and get some metal, some usable goods, and some real estate. Keep fiat cash on hand (minimize your risk as the unsecured creditor to the banks) as well. Anything you need or think you’ll need in the next few years is likely to hold its value better than your dollars, so buy sooner rather than later (and be prepared to defend it). I was reviewing my Amazon purchases over the past 18 months the other day (I know, bad but convenient) and every single one has gone up anywhere from 10-200%. Some of the numbers even shocked my husband. Freeze-dried food, of course, but enormous increase in cost of little AA/AAA lithium batteries.
A mixture of some metals is always a good idea. Platinum, while highly valuable, is not as easily identified by the average person so I’d stick with silver and gold – don’t go with the big names or overpay because it’s American coinage. Land is expensive and as karl notes, even more expensive to develop and build on right now, but it has enduring value and the benefit of more isolation and ability to be more self reliant. Even if you can only get a trailer up there and a well dug, you’re better off than most.
Buy farmland. There’s always a local farmer who’ll lease it from you. All you need is enough to pay taxes. It’s the ultimate store of value.
“Thoughts on this appreciated.”
Thoughts on what, exactly? What do you plan to do? How and where live?
Do you plan to buy hundreds of acres of farmland? Single-family houses? Where? For purchases like those, gold–assuming FedGov doesn’t outlaw it or seize it on pain of death or something like that. And assuming that FedGov can enforce such diktats. Ann assuming that everybody obeys whatever FedGov says. Assuming that there is an unfailing supply of electricity.
For daily purchases, silver. Assuming that cashiers (if there are any and if there’s anything to buy) even know what silver and gold are, which they don’t.
For barter?
What do you want to ask about?
Somebody’s been reading their Zoltan Pozsar.
In all seriousness, Z is right. I’d actually argue that the beginning of the end of Bretton Woods II was the Great Financial Crisis. Rather than defend the dollar’s price to oil, we printed like crazy to save ourselves. We broke the peg instead taking our medicine, and the rest of the world noticed.
You can see China and Russia switch from accumulating treasuries to using their dollars to buy anything tangible, particularly gold. They no longer trusted the dollar, which they, correctly, saw as a depreciating asset.
As if that wasn’t enough we cranked up inflation, causing the dollar’s value to fall even faster. And then for good measure, we seized the dollars (and Euros) of the Russian central bank, making an already shaky asset worthless. You’d really have to try to screw things up worse.
Moving to a different system will take time, but its end result is exactly as Z says. The dollar will be worth less and the US govt will need to reduce spending (or risk a bond market explosion). Our standard of living will decline and the govt will scramble to appease the huge number of people used to living off of the public tit.
On the positive side, manufacturing will return to our shores. In addition, Globo-homo-schlomo won’t be able to project nearly as much power around the world. In add, the world will be a better place.
Pozsar is not the first guy to talk about this. James Rickards wrote a book on the history of money 20 years ago called Currency Wars and he had a section on a global currency rooted in a basket of commodities. His idea, if I recall, is that Special Drawing Rights would be tied to energy and raw materials.
Completely agree. Rickards and others have been talking about this for decades. I just bring up Poszar because he’s an insider. When insiders start talking about this stuff in public, you know something has changed.
Interestingly, way back in 2009, the governor of the Bank of China brought up the use of a global currency based on commodities along the lines of Keynes’ Bancor, which would be based on the value of 30 commodities. The Chinese have been thinking about this for a long time.
Since ~2010, the Chinese have been stockpiling all kinds of commodities, not just gold. Obviously, they’re doing this to protect themselves, but I suspect that they’re also getting ready for a switch to some form of commodities-based global reserve.
At the end of the day, energy and food are life. Sooner or later, fiat currencies will bow to that reality.
I’ve been arguing for years that they asll ultimately come down to Energy. (and time).
The unit of currency should be the Erg – Just because of the great wiki definition.
“. An erg is approximately the amount of work done (or energy consumed) by one common house fly performing one “push up”, the leg-bending dip that brings its mouth to the surface ”
But I’d probably have to settle for a Newton.
(Wot? Where’s the Figs? would be the cry from our swarthy cohort.)
“I’ve been arguing for years that they asll ultimately come down to Energy.”
Or more precisely, and unfailing and universal supply of electricity and unfailing functioning of the internet.
“the govt will scramble to appease the huge number of people used to living off of the public tit.”
Maybe they will even stop importing our demo replacements because they are a net loss for the public purse and Globohomo can no longer afford their pets. That’s the single greatest potential benefit; a possible bandage on our demographic replacement.
> Maybe they will even stop importing our demo replacements because they are a net loss for the public purse and Globohomo can no longer afford their pets.
I think it’s simple: Those of us in flyover country eat the food we produce, and the imported hoards eat their former masters. The problem eventually solves itself.
That assumes our leaders engaging in rational cost-benefit analysis. Remember, too, it’s not their money they are spending. They have already shown they hold their ideology as more important than the health of the nation. What’s another few dozen trillion worth of fake money?
True, I momentarily forgot we’re talking about people who think ‘what’s the difference between a man and a woman’ is a hard question. We’d literally be better off being run by 5 yr olds.
The median income (2020 SSA stats) in the US is $34.6K. If you live within an hour’s commute of a major metropolitan area on that wage it’s likely you’re on some kind of public assistance. I’m not shaming those people. They’re under incessant pressure from open borders. It’s this crowd https://tinyurl.com/2uts8ywk where they openly despise this Country and the people who allowed them in. (I was shocked, TBH.)
Moran: Whatever the rational action is, expect the government to do the opposite. When/if people start shooting those coming to steal their food, then I’ll accept that the fundamentals have changed. Until then, continue to operate under the current parameters – they hate you, they want you dead, and until you die they want you immiserated. Plan accordingly, and keep your head down.
It takes a lot to get elites to think. Often thinking patterns are so ingrained they can be face up under a guillotine and unable to understand even after an explanation why they are there.
As Upton Sinclair put it “You can’t teach a man something his job require he not know.”
He may have said that, or if not, it is a decent paraphrase of the “official” quotation.
https://www.oxfordreference.com/view/10.1093/acref/9780191826719.001.0001/q-oro-ed4-00010168
“Maybe they will even stop importing our demo replacements … .”
More likely is that the parasites will have no interest in colonizing AINO if they are no longer subsidized.
Life has been unpleasant in the West for some time at the spiritual and emotional level. The trade-off was for material prosperity. If and when that goes, what will be the incentive for strangers, both inside and outside its official borders, to support the continuation of the Empire? My guess is the Empire will lash out domestically (already happening) and internationally (also already happening) until it fizzles out.
We will own less and be very, very angry and dangerous.
We’re already dangerous…at many levels.
everyone assumes that the collapse of the current system will be a whiskey wet dream of misery. an American version of the holodomor. i disagree. the US has too much raw material to work from, and rebuild with. power is fungible; what the fedgov loses, the stategovs will gain. at the end of the process the current crushing level of bureaucracy will be greatly reduced. culturally the country will have put the degenerates back in the box where they belong (those that are still alive). synthesis will be served.
Agree. It will be a somewhat diminished material lifestyle but a far happier one. People have grown weary of the suffocating omnipresence of Empire, nowhere more than within its legally defined borders. It will lash out and play out as it recedes.
> what the fedgov loses, the stategovs will gain.
Absolutely this! As the world moves away from financialization and towards energy/food/materials as money, the conservative parts of the USA gain power both economically and politically. Financialization is really the only area of strength that the Blue States have, and the last thread of dependency the Red States have with them.
karl: Yes and no. Agree re natural resources, but one also needs the trained and qualified manpower AND the brainpower to rebuild/redevelop. Our demographic transformation means we have a dearth of both. If we were to lose at least 50% of the black and brown bell curve, then I might be more sanguine. I don’t think many of them will simply up and voluntarily leave as things go south – still better to be a parasite in a White heritage country. That’s why they’re still clamoring to get in, even as we see food costs skyrocket and every civil structure shake on its foundations.
Historically warfare solves these issues.
Also while I want to deport people not import them , most US Hispanics work and have intact families.
They often have some measure of skills as well and with closed borders , deportation of some and expulsion/hanging of trouble makers our society will recover.
It will be a bit browner and lower trust that later being a good thing but will function. We become Argentina or the like , join the rest of the Americans as muddle by.
“Trade will continue, but between countries rather than independent global enterprises.”
Great column, macroecon is not a strong suit of mine so I appreciate a ‘soft’ intro into this. The above quote is good news for us and gives rise to a testable prediction; Globohomo, ie Davos and friends, are going to wrestle control of central banks away from national governments because national governments will increasingly be of the Orban type (if elections are even half honest; they probably have to be b/c in 2020 they got away with it but bled several pints of legitimacy).
Also, isn’t natural resource prices the second worst way to take on Russia (after nukes)?? It seems that, second only to nukes, natural resources is Russia’s strongest position in international power. What is going to happen if you storm their second strongest fortress? You will probably be mowed down. Sun Tzu would have suggested to fight Russia where Russia is not very strong. Nukes and natural resources are probably the two worst ways to fight Russia. Which I have a little regret saying I am actually happy about. Because I want Globohomo down. Even – I can’t believe I’m saying this, cross my heart – if it means allying w the CCP. I want the filth running our national affairs gone, even at a heavy price. They are the scum of the earth.
” … Globohomo, ie Davos and friends, are going to wrestle control of central banks away from national governments … .”
That might not be necessary. The bill has now been introduced in Congress by which the power to coin and print “money” is to be taken from the Federal Reserve and given to the Treasury (meaning the White House).
Also, several years ago, FedGov allowed Big Tech to get into the banking business, which they have been doing and which is probably related to the Great Reset’s intention to force the world into a digital “currency.”
We shall see. There’s a lot in that bill, but given the reality that the GOPe is the reverse face of the globalist coin, there’s no reason for us to expect anybody to represent our opposition to these arrangements.
And in any event, the US gov’t does not control the Federal Reserve Bank. It’s a private consortium of private banks. We are not even allowed–by law–to know who is part of the Fed system. The president appoints the Fed Head. That’s our “representation.”
So there’s no reason to expect Globohomo to try to wrest control of central banks from various governments. Globohomo’s end run around the whole setup is already well advanced.
So they are clearly betting on being able to hold the executive branch in the US. I think everyone around the global table is gradually realizing this is becoming the real remodeling of global power structures. This is the first time they really shake the bag after WW2 to find a new pecking order. It’s no holds barred all-round now.
Well spotted! That had not even occurred to me, but I’d have to agree with your assessment.
Your whole post seems right on the money to me, although I’d have shortened it by saying that the whole thing is just another s**t show.
But yes, I think you’re right.
The Federal Reserve already backs other systems via its extensive currency swap lines of credit with other central banks. Lots of good conspiracy theories on this subject float around Wall St. The last major outbreak of swap activity occurred in late 2019; many speculate that the Fed bailed out Nomura. Of course, all this stuff is top secret.
this is what is so perverse about the biden led progs; they refuse to do the smart play, ever. they take a perverse pride in doing the absolute worst thing – for their own interests – at every opportunity. and then brag about it. the smart play would have been to ramp up US oil and food production, to drive down world prices, and starve Russia of earnings. also should have traded ukraine for something useful, not make it a critical piece…
We’re supposed to lose, that’s the whole point of it. Schmuel stole the last sheckel, now he’s moving east.
“seign·ior·age:
HISTORICAL
a thing claimed by a sovereign or feudal superior as a prerogative.”
I guess in Biden’s case that would include ten percent of any deals arranged by his crackhead son, and the right to sniff the heads of any girls traveling through his kingdom.
Each age seems to have its iconic images that seem to sum up the nature of that time, and the balance (or imbalance) of power. Martin Luther nailing his theses to a church door is one. Centuries later, a man landing on the moon is another. What is the image most associated with America at this point in time? Desperate abandoned soldiers falling from the landing gear of aircraft fleeing Kabul? Biden shouting like a man in a rest home about how his hairy legs turn blond in the sun? Or a hulking dude in a bathing cap, cowering over a passel of disheartened, female swimmers?
Take your pick, I guess, but it’s all bad and everyone knows it. Hard times are endurable, but being a joke is just pure humiliation. At least the dollar will be losing power as they’re se to introduce the “Tubby,” as Jared Taylor calls the Harriet Tubman bill.
my favorite is: Droit du seigneur
Just put Harriet Tubman’s ugly mug on all US currency – if that doesn’t inspire worldwide confidence, I don’t know what will. After all, they’re are most precious resource.
On the other hand, Europe needs to ditch its symbiotic relationship with this port-a-potty of a landmass – one would think they can see we’re (and by extension, they are ) ruled over by (((lunatics & psychos))). Just say freaking NO for once.
I’ve become convinced that America has to retreat from being a global empire to become free here. Invade the world, invite the world, crack down on your own people. When that retreat and financial reordering happen, it’s not going to be a really pleasant experience, though.
That’s what President Washington envisioned. Avoiding foreign entanglements, etc. . . .