But can you eat it? Or live in it? Or buy anything you actually need today with it? Or perhaps you own a plot of land where you can mine it? In which case you will own everybody else who thinks they can eat it etc.
In other words, all money including whatever commodity you want to assume is money, is in fact, nothing more or less than a future claim - a trust certificate if you like - on energy, that the community you live in accepts as such a claim. And remember you can't eat these claims either.
And of course this exactly the description that Hudson, Keen, Graeber the MMT crowd, dozens of central banks globally etc., and all those who have studied double entry bookkeeping have proposed is the correct description of how money is created too.
Money and credit have lost the initial meanings they had centuries ago. The problem with fiat currencies is their actual worth and what they're genuinely backed by. Currencies backed by a basket of commodities may have a stronger degree of worth but are they convertible into those commodities. And as Hudson and Desai point out in the linked article, ultimately the valuation is political. For example, why does the dollar have a higher value than the ruble or the yuan? Simple: because it's the so-called reserve currency used for international trade and thus there's a demand for dollars that drives its worth. But now that the USG has shown it's willing to steal that worth it's become unreliable, and that the dollar must be replaced. Thus, the USG--like the Joker--is burning up its currency by its behavior. The replacement is being constructed as I type and will be introduced at some point, perhaps at the BRICS Summit in Kazan in October.
if i could add one thought to this - at the end of ww2 when essentially the british empire was being replaced with the usa empire, one of the fringe benefits of this was denominating trade in oil in us$... it may seem like a simple thing, but this puts great emphasis on acquiring us$, and on the value of the us$... these bretton woods agreements which have created the imf, world bank and etc. etc. - are a critical component to the financial ponzi scheme that must be taken down...
just how it gets replaced is hard to know.. okay - that was more then one thought, lol..
Fiat currencies are based upon trust, backed by governments, that ownership of a quantity of such currency will be redeemable primarily to settle taxes bills raised by that government. Secondarily for commodities on the open market.
According to Graeber, this has been the basis of fiat currencies (clay tablets) for 5000 years!
Relative "value" of currencies simply reflects relative trust.
The "Unit" has been posited as a BRICS currency, but it seems bilateral settlements are the main reserve $ replacement.
We shall see what occurs. I've made my predictions except for timing. There's a great roiling happening now that might escalate. Japan's ending its ZIRP and raising its rate has triggered something capable of becoming much larger.
I have said many a time that it is very hard to defeat Wall Street.
Me, myself and I, interpret the recent stock market slide as a Wall Street manipulation of Fed Chair Powell to get one Federal Reserve rate cut in September and maybe a few more.
The talk, not to my surprise, has switched to 'we are already in a recession.' There is a pile-on on that meme from many self serving sides.
The Queen for a Day will likely see the rise of DJT who will get clear instructions on bringing the deficit down.
Never mind the EU and Europe. They now have Ukraine to worry about, ha, ha.
All of a sudden US is deep in recession! This time it was not "slowly, then all at once"!
Economic data in US has been suspect! For how long?
US economy is/was at best stagnant since the great financial crisis!
Dollar hegemony and the fact the G7 currencies are as sick if not sicker than the US $!
That said 5.3% overnight rates did little more than slow the degradation of the dollar as M2 money supply has stayed close to the tops achieved when the federal reserve printed 5 trillion bucks for covid bailouts! Financial conditions in US are loose as geese! Biden's $1.9 trillion splurge in 2021 is inflation!
Lending to Uncle Sam creates money, that if lent to commercial entity would be destroyed when the loan paid,
Uncle Sam never repays so the fed needs always to print.
Next is stagflation, a direct result of Bidenomics. Which at best were passive debt financed puny growth.
John Williams Shadow Stats has adjusted numbers that can be useful regarding inflation and employment/unemployment. Most suspect the numbers given by governments are fudged but only a few understand the deeply systemic nature of how bad the numbers really are; unemployment at single figures has been a fraud for at least three decades.
It appears his site was attacked and rendered ineffective last August, although it's still there with no updates. I never subscribed as his public figures and analysis was always enough for my purposes. There're huge black and brown economies within the Empire where all those unemployed not reported find a way to survive.
Thank you for pointing out the article by Michael Hudson. This article touches on the core behind geopolitics and I shared it right away. Politics is not about policy, it's about capital.
thank you, karl. if it wouldn't be an imposition, i know you are very busy, if you might suggest how someone in the vassal, canada, or the outlaw united snakes might go about buying chinese bonds? thank you. blessings.
Find a branch of the Bank of China. For me, there's one in Los Angeles. Do a search for Bank of China Canada and you'll get its locations. You can then call and talk to them about such purchases. I'd avoid going through a broker, however.
I own gold myself, but it's offshore now - in a facility not owned by a Western company. For all the appeal of the bullion under the bed, it won't help anyone when confiscation starts - and I would say that confiscation is a sure bet at this stage.
I'm not sure there's any safe place; Australia implemented bail in legislation in 2018 and regardless all are heavily exposed to mortgage debt. Cash may have some utility at the start of crisis when electronic banking shutdowns eventuate for whatever reason. Medium to longer term government can simply nullify cash by declaring certain banknotes invalid. Then there's the tangled web of crypto which has been used to bypass sanctions, but has the same problem of banks electronic ledgers, it requires electricity to operate. When chaos is unleashed it's local relationships and barter/IOUs that will likely get some people through. Dmitri Orlov's books are useful guideposts re: post soviet experience.
I'm well versed in local currencies, and it's entirely plausible here for state's to formulate their own public banks. The only restriction is they can't mint coinage, but they can produce their own banknotes, which is how the US banking system--if it can be called that--operated in the years from 1776 to 1913. Banks issued their own paper, but its value depended on several variables, such as distance from said bank.
If I were responding to the USA theft of Russian assets, I would advise EUSA that their seizure will be treated as a loan commencing at 17% and incrementing a further 1%pa. Repayments on a monthly basis.
There is no way out of the sh!thole the EUSA has dug for itself.
I've held the position that the global majority should declare IMF/World Bank debt null and void, as in odious debt. Further western mines, and infrastructure should be nationalised. And finally complete expulsion of their "diplomatic" missions and various propaganda/NGOs.
This is called not interrupting your enemy while he is making mistakes
The RF have, they have said, at least as much if not more in nationalisable private western assets in Russia
So, the RF say, you are merely taxing your own companies
Others say that the RF has a great deal more than this more or less €300B, more like €1T
RF can sue Euroclear, in Europe, in Russia, worldwide - some EU types say this may bankrupt Euroclear and put in danger their€27T in managed assets
Other EU types say this step would be the end of the Euro and of investment in Euro assets - and call to witness statements by the SA and the Indonesain gvmts to this point
Now the USA is concerned to weaken EU and the Euro - and not all EU or Europeans are that stupid to not know it, or otherwise bribed or beholden to the derp state
Hudson is, at best, still shockingly ignorant on Bitcoin:
“It’s completely different. Blockchain, you know where the money is. Bitcoin and any cryptocurrency is like a mutual fund where you put the money in, but unlike mutual funds, you have no idea where the money is put. The whole philosophy behind Bitcoins is if you do peer-to-peer, then you can avoid the banking system, which you don’t like. You can avoid the government security system, which people don’t like. It’ll be peer-to-peer. Well, a peer-to-peer is you to the person who’s running, to Bankman-Fried, for instance. He’s your peer. The money doesn’t get put into a bank or a government security. It’s put into his own personal bank account, and he gives it to his friends and politicians or does whatever he wants, and you have no idea of what’s happening to it. That’s the problem, and if you look at Bitcoin going up and down, that is not a stable measure of value. You can see what happened when Ecuador tried to use Bitcoin, so it’s just not suited. It’s rife for criminal activity, and imagine what happens if you lose the special email address that you have to do. Then you’ve lost all of your national reserves. All that happens is the government building blows up, and Bitcoin gets billions of dollars, so no, it’s not an appropriate investment.”
I wouldn’t buy Chinese bonds as China’s debt isn’t really tenable either. Close to 40% which is a dangerously high ratio. The US and friends stay above water thanks to the financialized ponzi scheme and offshoring debt through reserves. Realistically if you’re inside the US, physical gold is the ticket.
GOLD.
It must be physical gold or silver, not paper.
The only kind!
But can you eat it? Or live in it? Or buy anything you actually need today with it? Or perhaps you own a plot of land where you can mine it? In which case you will own everybody else who thinks they can eat it etc.
In other words, all money including whatever commodity you want to assume is money, is in fact, nothing more or less than a future claim - a trust certificate if you like - on energy, that the community you live in accepts as such a claim. And remember you can't eat these claims either.
And of course this exactly the description that Hudson, Keen, Graeber the MMT crowd, dozens of central banks globally etc., and all those who have studied double entry bookkeeping have proposed is the correct description of how money is created too.
Money and credit have lost the initial meanings they had centuries ago. The problem with fiat currencies is their actual worth and what they're genuinely backed by. Currencies backed by a basket of commodities may have a stronger degree of worth but are they convertible into those commodities. And as Hudson and Desai point out in the linked article, ultimately the valuation is political. For example, why does the dollar have a higher value than the ruble or the yuan? Simple: because it's the so-called reserve currency used for international trade and thus there's a demand for dollars that drives its worth. But now that the USG has shown it's willing to steal that worth it's become unreliable, and that the dollar must be replaced. Thus, the USG--like the Joker--is burning up its currency by its behavior. The replacement is being constructed as I type and will be introduced at some point, perhaps at the BRICS Summit in Kazan in October.
if i could add one thought to this - at the end of ww2 when essentially the british empire was being replaced with the usa empire, one of the fringe benefits of this was denominating trade in oil in us$... it may seem like a simple thing, but this puts great emphasis on acquiring us$, and on the value of the us$... these bretton woods agreements which have created the imf, world bank and etc. etc. - are a critical component to the financial ponzi scheme that must be taken down...
just how it gets replaced is hard to know.. okay - that was more then one thought, lol..
Fiat currencies are based upon trust, backed by governments, that ownership of a quantity of such currency will be redeemable primarily to settle taxes bills raised by that government. Secondarily for commodities on the open market.
According to Graeber, this has been the basis of fiat currencies (clay tablets) for 5000 years!
Relative "value" of currencies simply reflects relative trust.
The "Unit" has been posited as a BRICS currency, but it seems bilateral settlements are the main reserve $ replacement.
We shall see what occurs. I've made my predictions except for timing. There's a great roiling happening now that might escalate. Japan's ending its ZIRP and raising its rate has triggered something capable of becoming much larger.
“The root problem with conventional currency is all the trust that’s required to make them work”
-Satoshi, 2009
All kinds of good reasons to put our money into credit unions. Here's another. Thanks for this important but scary info, Karl.
I have said many a time that it is very hard to defeat Wall Street.
Me, myself and I, interpret the recent stock market slide as a Wall Street manipulation of Fed Chair Powell to get one Federal Reserve rate cut in September and maybe a few more.
The talk, not to my surprise, has switched to 'we are already in a recession.' There is a pile-on on that meme from many self serving sides.
The Queen for a Day will likely see the rise of DJT who will get clear instructions on bringing the deficit down.
Never mind the EU and Europe. They now have Ukraine to worry about, ha, ha.
Yeah, the good old recession lie. The USA's been in recession since 1998 but don't tell anyone.
All of a sudden US is deep in recession! This time it was not "slowly, then all at once"!
Economic data in US has been suspect! For how long?
US economy is/was at best stagnant since the great financial crisis!
Dollar hegemony and the fact the G7 currencies are as sick if not sicker than the US $!
That said 5.3% overnight rates did little more than slow the degradation of the dollar as M2 money supply has stayed close to the tops achieved when the federal reserve printed 5 trillion bucks for covid bailouts! Financial conditions in US are loose as geese! Biden's $1.9 trillion splurge in 2021 is inflation!
Lending to Uncle Sam creates money, that if lent to commercial entity would be destroyed when the loan paid,
Uncle Sam never repays so the fed needs always to print.
Next is stagflation, a direct result of Bidenomics. Which at best were passive debt financed puny growth.
John Williams Shadow Stats has adjusted numbers that can be useful regarding inflation and employment/unemployment. Most suspect the numbers given by governments are fudged but only a few understand the deeply systemic nature of how bad the numbers really are; unemployment at single figures has been a fraud for at least three decades.
It appears his site was attacked and rendered ineffective last August, although it's still there with no updates. I never subscribed as his public figures and analysis was always enough for my purposes. There're huge black and brown economies within the Empire where all those unemployed not reported find a way to survive.
The only government financial stats I will deign to peruse are from the St. Louis Fed.
The Household Survey varies from the business employment survey for a reason.
Thank you for pointing out the article by Michael Hudson. This article touches on the core behind geopolitics and I shared it right away. Politics is not about policy, it's about capital.
Burkina Faso just announced it's keeping not selling it's gold with a currency backed by gold in view
Thank you Karl for this -I will read the latest Hudson
thank you, karl. if it wouldn't be an imposition, i know you are very busy, if you might suggest how someone in the vassal, canada, or the outlaw united snakes might go about buying chinese bonds? thank you. blessings.
Find a branch of the Bank of China. For me, there's one in Los Angeles. Do a search for Bank of China Canada and you'll get its locations. You can then call and talk to them about such purchases. I'd avoid going through a broker, however.
🕊️ thank you, karl.
"But I would buy Chinese bonds."
Well, I suppose, that they might have a sense of the weight earned over thousands of years of wise Chinese civilization. The other one is a weapon.
I own gold myself, but it's offshore now - in a facility not owned by a Western company. For all the appeal of the bullion under the bed, it won't help anyone when confiscation starts - and I would say that confiscation is a sure bet at this stage.
I'm not sure there's any safe place; Australia implemented bail in legislation in 2018 and regardless all are heavily exposed to mortgage debt. Cash may have some utility at the start of crisis when electronic banking shutdowns eventuate for whatever reason. Medium to longer term government can simply nullify cash by declaring certain banknotes invalid. Then there's the tangled web of crypto which has been used to bypass sanctions, but has the same problem of banks electronic ledgers, it requires electricity to operate. When chaos is unleashed it's local relationships and barter/IOUs that will likely get some people through. Dmitri Orlov's books are useful guideposts re: post soviet experience.
I'm well versed in local currencies, and it's entirely plausible here for state's to formulate their own public banks. The only restriction is they can't mint coinage, but they can produce their own banknotes, which is how the US banking system--if it can be called that--operated in the years from 1776 to 1913. Banks issued their own paper, but its value depended on several variables, such as distance from said bank.
If I were responding to the USA theft of Russian assets, I would advise EUSA that their seizure will be treated as a loan commencing at 17% and incrementing a further 1%pa. Repayments on a monthly basis.
There is no way out of the sh!thole the EUSA has dug for itself.
I've held the position that the global majority should declare IMF/World Bank debt null and void, as in odious debt. Further western mines, and infrastructure should be nationalised. And finally complete expulsion of their "diplomatic" missions and various propaganda/NGOs.
This is called not interrupting your enemy while he is making mistakes
The RF have, they have said, at least as much if not more in nationalisable private western assets in Russia
So, the RF say, you are merely taxing your own companies
Others say that the RF has a great deal more than this more or less €300B, more like €1T
RF can sue Euroclear, in Europe, in Russia, worldwide - some EU types say this may bankrupt Euroclear and put in danger their€27T in managed assets
Other EU types say this step would be the end of the Euro and of investment in Euro assets - and call to witness statements by the SA and the Indonesain gvmts to this point
Now the USA is concerned to weaken EU and the Euro - and not all EU or Europeans are that stupid to not know it, or otherwise bribed or beholden to the derp state
So......maybe maybe not
Excellent article-you have the finger on the geopolitical pulse-watch gold the higher it goes the closer we are to WW3
Paganism goes up in smoke!!
Thank God Almighty, we're free at last!!
Hudson is, at best, still shockingly ignorant on Bitcoin:
“It’s completely different. Blockchain, you know where the money is. Bitcoin and any cryptocurrency is like a mutual fund where you put the money in, but unlike mutual funds, you have no idea where the money is put. The whole philosophy behind Bitcoins is if you do peer-to-peer, then you can avoid the banking system, which you don’t like. You can avoid the government security system, which people don’t like. It’ll be peer-to-peer. Well, a peer-to-peer is you to the person who’s running, to Bankman-Fried, for instance. He’s your peer. The money doesn’t get put into a bank or a government security. It’s put into his own personal bank account, and he gives it to his friends and politicians or does whatever he wants, and you have no idea of what’s happening to it. That’s the problem, and if you look at Bitcoin going up and down, that is not a stable measure of value. You can see what happened when Ecuador tried to use Bitcoin, so it’s just not suited. It’s rife for criminal activity, and imagine what happens if you lose the special email address that you have to do. Then you’ve lost all of your national reserves. All that happens is the government building blows up, and Bitcoin gets billions of dollars, so no, it’s not an appropriate investment.”
I wouldn’t buy Chinese bonds as China’s debt isn’t really tenable either. Close to 40% which is a dangerously high ratio. The US and friends stay above water thanks to the financialized ponzi scheme and offshoring debt through reserves. Realistically if you’re inside the US, physical gold is the ticket.