There has been lots of talk lately about the need to embrace the gold standard for currency again because of America abusing the dollar. There are two issues that need to be separated, and the answers are not as simple as it might seem.
The reason why gold functioned as currency for the majority of history is that mankind had a solar powered economy. This means it was restricted by the amount of agricultural land that was used to convert solar energy into carbohydrates. Also, solar power was used for energy, in form of wood and coal. This made the total supply of energy available to mankind more-less constant. Also, technology was primitive and constant. This made the economy constrained, and its volume could be represented by another constrained resource, gold. Essentially, you could dig out just enough new gold to match the eventual growth of the economy. However, the problems started with the industrial revolution, where new inventions could multiply the size of the economy, and the monetary supply remained constricted. When petroleum use freed mankind from solar restrictions on energy by tapping into a huge energy buffer of oil reserves, invention of electricity broke all restrictions wide open, and Haber-Bosch method of synthesizing artificial fertilizers allowed for a huge increase in food supply, the economy and population started growing exponentially, and the monetary supply needed to be expanded far beyond the constraints of any single constrained resource. So, having in mind that the supply of gold couldn’t successfully cover the expanding economy even in the times of Tesla, Westinghouse and Rockefeller, and needed to be supplanted and eventually replaced by mechanisms based on mortgage loans and GDP calculations, suggesting an introduction of a currency backed by gold at this point reveals lack of understanding of the constrictive effect that would have on mankind. With gold, the totality of everybody’s wealth always equals the totality of gold in supply. With a gold standard, if you invent something that grows the economy by 30%, the supply of gold doesn’t grow by 30% to match, which causes a shortage of money in circulation and artificial appreciation of gold, favouring those who already hold the most gold, instead of giving power to the inventors and “new money”. Of course, if gold-backed paper money is used, the state will print more money in order to keep up with the economy, but then this money will lose convertibility into gold. This is the reason why gold standard was removed: it was a problem rather than a solution. When economy grew, for instance by the size of petroleum reserves, it was much better to use petroleum reserves as basis for currency than to try and dig out enough gold to represent the value of all the oil in the world, or to artificially inflate the value of gold to the comic proportions. Also, when someone came to the bank to request a loan, the bank could either say “sorry, but there’s not enough money in circulation to give you a loan, because we didn’t dig out enough gold this month”, or they could say “we can take the mortgage papers as backing for a low-interest loan we can get from the central bank, which will use this guarantee as backing and create new money which we will then sell you at increased interest”. Guess which turned out to be more acceptable for a growing economy.
However, when you allow someone to print papers saying “this paper represents a gold coin”, you will inevitably get more papers than gold coins, because the position where you can create money out of thin air is incredibly tempting. The first experiment with paper money in ancient China ended for exactly those reasons. But that is a separate matter: you can’t say that abuses of the fiat currency system justify returning to the gold standard, if the gold standard was not viable even in the 1930s, due to its restricting hold on economy. You can only make a currency that is required to be backed by actual physical resources, such as metals, petroleum, electric currency production, foreign currency reserves, and mortgages on physical assets. You can require solid backing for all newly printed money, but gold, there’s just not enough of it in existence to cover the value of our economy. It can’t even cover a minute fraction. And even if there were enough gold, it would work only if our economy remained constant. For a 5% growth in economy, you would need to have 5% of increase in total supply of gold, which is utterly unrealistic.
There is that other matter of dollar being an instrument of pressure and abuse, which warrants its removal from the position it presently holds. This would require the United States to relinquish a position where they can print new money out of thin air, and have the rest of the world pay for it; essentially, that’s what you get when everybody is forced to pay for petroleum in dollars. Instead of the normal inflatory effects you would get from increasing the supply of money in circulation, you get the situation where the rest of the world is artificially impoverished and American economy is artificially boosted. If you think America would relinquish this position without a very ugly world war, I have some real estate on the Moon to sell you.
However, there is a reason why America might actually find it preferable to have dollar crash and burn, despite all its obvious benefits. You see, all American debt is denominated in dollars. Also, American debt is so huge, it approaches the point of being unserviceable. There is a very easy and tempting solution for this: America can just print trillions of new dollars without any backing, and use them to cover their debts and thus reset their situation. Of course, that wouldn’t sit well with all the nations that hold American state bonds denominated in dollars, and would basically crash the world economy and monetary system in an instant, producing an avalanche of consequences, and that’s the reason why other great powers have been diversifying their assets, from US bonds to gold, rare earth minerals, etc.; because they see this coming. Either America will cause a world war to cover its naked butt, or remove any semblance of a fig leaf by simply resetting its debt to zero using the aforementioned method. Of course, having in mind that this would wipe out all retirement funds and personal savings of their citizens, this method would be hugely unpopular and would need to be covered up by some fabricated external factor. This is why I find a war to be much more likely. They will stir the pot so much, nobody will pay any attention to the little man behind a curtain pulling the levers and pressing the buttons. The plan seems to be to provoke Russia and China into a war, suffer a limited nuclear strike, introduce martial law, and then reset their debt and thus hide their plan behind some external villainous force, playing the poor victim of evil in the world. There is too much propaganda to that effect already in place for me to have any confidence in the possibility that I might be wrong.
If we know that 70% of US national debt is actually owned by Muricans I’m not sure why that 30% of debt being owned by foreign actors would represent a problem? I think that some years ago “only” 50% of US national debt was owned by Muricans. In case that all of that debt would be in Chinese, Japanese, German, etc. hands wouldn’t we have a world war long time ago and I wouldn’t have chance to leave a reply on Disqus with regards to this topic?! 🤔🤔🤔
Well, I guess if they wipe out their own pension funds but present it as Russia and China’s fault, it’s two birds with one stone. I can imagine the main reason why China avoided dumping US bonds would be to avoid this situation. Also, both Russia and China are intentionally stalling and playing for time, because they know what the “power over time” graph looks for them, and for America. They get stronger, America gets weaker. If they can get America in a situation where it goes bankrupt before going to open war with them, then an all-out nuclear conflict can be avoided. However, the guys running America know best how much time they actually have, and they will dispense with the fig leaf thing if necessary. In fact it’s quite easy, you do a false flag, blame it on Russia/China/Iran/Santa Claus, do a first strike presented as “retaliation” and there you go. It’s very easy to portray yourself as a good guy if you control people’s access to the media, and that’s being taken care of as we speak. Alex Jones is out, Assange is out, …
So, essentially they’ll launch first strike before guys that should retire find out they cannot be paid out?
Yeah, Alex Jones and Assange are out … guess Paul Joseph Watson and some others that I don’t know of are going to be demonetized and deplatformed from Facebook, Twitter and Youtube soon enough along with Russia Today and then we can have a nice cup of Big Brother altogether. 😳
I would put it somewhat more broadly: they will cook up a big enough war to hide the actual state of the American economy and the end-result of the American model of civilization, before the actual state is revealed to the general populace. I can see them attempting to cook up the version of history where everything was sunshine and roses and then the big bad dragon/bear came and blew their house of cards, err… brick and mortar… down. And when the radioactive cesium settles, they can rebuild, safe in the knowledge that America is the best.
Their current economy looks like someone in 2008 took a long look at the state of things and said “ok guys, this is not salvageable; the best we can do is use very dirty hacks like printing the order of magnitude of a hundred trillion dollars without any backing other than military force and act like global thugs of the worst kind and buy ourselves ten years, and we better hide our tracks because if anyone ever figures out what we did here, it won’t be good”. You don’t go that much in debt and expect to repay it. Also, you don’t expect to pull off an “oopsie” and just default on it. You need some apparently valid reason for a default, and you need to make sure all your competition is wiped out for the duration of your downtime, because if they are not, you will never catch up. So, what I think is happening is this: they cooked up wars in the middle east first, in order to destroy the accumulation of money there from petroleum sales; after that is done, the Arabs are down for the count. Then destabilize EU, by forcing them into harmful economic sanctions of Russia and China, which would otherwise save the EU economy. Also, import Muslims into Europe in order to cook up a devastating civil war and to destroy Europe forever. China and Russia are left for last because I think they intend to deal with them with nuclear weapons, I don’t think they think anything else would work. However, first they need to vilify them, so that the world will accept the American interpretation of the war, which is of course that the big red menace did it, and poor America had another Pearl Harbor.
Who are the they’s? The presumptions are good and I agree .
Curious, as to whom you both believe the “they’s” are.
It’s a complicated picture. Most of the strings I saw pulled lately were pulled by the CIA. Tightly controlled and coordinated press, ability to pressure/influence key players to do certain things at a certain time, politicians in the West singing in complete unison, it all points to an intelligence agency that’s been in tight control of politicians, journalists, NGOs and all other forms of opinion and policy control. CIA was definitely the one implementing things. As to who’s making the policy, I’d say there’s some “board of directors” somewhere in Langley, where people from Pentagon, CIA, NSA and probably the industrial part of the “military-industrial complex”, sit down and decide things. But it’s not as simple, because the people controlling the banking system and finances are also present, and they tell them the situation – if they know the economy can’t be pushed for longer than the date x, then the rest of the “board” will have to set things in motion before the date x. Also, Israeli lobby is strong and pushes for certain policies, and they can be loud and messy if not accommodated. The Saudi lobby is also significant, and Obama unfortunately managed to infiltrate lots of Muslim agents into the system and that’s a serious problem. They push for certain things, mostly waging a cultural war against the Western civilization under false pretenses of feminism, equality or fighting some imaginary “-ism”. Sure, to people who aren’t really good at thinking it’s easy to say it’s all Jews doing a conspiracy, but to me this all looks like a complicated mess where multiple power sources are influencing things their way, obstructing each other partially while also cooperating in other matters, but to me it looks actually worse, it looks like there’s also a strong influence of some think-tank of futurists who are all into AI and wars between the AI and technologically augmented humans long way into the future, there’s influence from very rich people who think they are tasked by transcendental forces to do this or that thing, and from powerful religious people who want to act out the end-of-the-world scenarios from their scripture. That might look crazy but I think this mess is actually the closest approximation of what’s going on.
Some parts are obvious – for instance, Israel wants to use America to destroy Iran before the crisis gets so bad that the American military runs out of money and Israel is left undefended against the hostile neighbors; they were also behind the process of decivilization of Syria. The influences in America pushing for the war with Iran are obviously all driven by Israel, so, those who love the Jewish conspiracy theories can be pleased. 🙂