Look the Fed and the government have two lousy options, both of which they created with stupid fiscal and monetary policies. They either let the economy collapse suddenly or they slowly devalue the currency. They won’t cut spending because they are afraid to say no to voters and special interests (donor class) who suddenly get less. Now obviously anybody outside the august chambers of the geniuses running things, who lives in the real world, would start to look to create efficiencies and cut the enormous waste. Who in the real world can lose hundreds of billions of dollars on a regular basis when audited and not go to jail? But these people have other imperatives driving their actions. OPM is a powerful drug.
So as a person trying to live, you need to overcome inflation, currency debasement, higher interest rates, taxation and it’s getting hard even for the upper middle class. One presentation I saw recently estimates the actual hurdle rate to get ahead of inflation/ debasement/ higher interest rates at about 15% per annum. Only two investment classes beat that over the last decade or so - Bitcoin and the NASDAQ. Everything else either treads water - S&P or is upside down.
Eventually currency debasement will likely get to the same place as collapse.
But nobody seems motivated to fix the problem because they put their self interest ahead of the nation. Practically every advanced country is in a similar situation to a greater or lesser extent.
A little push from here, a little shove from there, and the house of cards comes a tumbling down.
Well we’re gonna find out. I suspect when the panic selling starts, you’re right. But after the dust settles fiat will be gone and BTC will remain. I also have a suspicion that there may be some sort of debt jubilee and backing of currency with hard money - physical gold, BTC.
In any event, the current program is deteriorating and fixing the money is a big part of fixing the mess we are in.
What most commentators fail to appreciate about Nixon's closing the gold window in 1971 was that he didn't just unmoor the dollar from gold, he unmoored ALL currencies from gold.
The objection that DeGaulle and others had to the Bretton Woods system was that it was a de jure establishment of the dollar as a global reserve currency. All the major currencies of the time were established in relation to the dollar, not to gold. The only connection currencies had to a gold standard of any kind was through the dollar (the exception was the Swiss franc, did not actually ditch the gold standard until 1999).
At the time, other nations screamed like mashed cats--which prompted Treasury Secretary John Connally's infamous "it's your problem" retort. But they went along with it. And since that time the Euro area in particular has done MORE money printing than the US (not to mention Russia and China, which have inflated their currencies several orders of magnitude beyond anything even contemplated by the Fed). Ultimately the governments of the world decided that fiat was better than sound money.
Here's the thing: inflation has not tracked with the money printing. Not even ShadowStats data shows inflation tracking to money supply growth.
Here's the other thing: gold has not appreciated in any correlation either to money supply growth or inflation. If you look at BTC valuations, it also has not tracked to inflation.
What we are seeing now is a complete inversion of the traditional economic norm: instead of valuing dollars in terms of gold, we now value gold in terms of dollars. More accruately we value gold in terms of fiat currency (dollar, euro, et cetera). We value BTC also in terms of fiat currency. And we value fiat currencies in terms of each other.
When the fiat money system collapses, that's a singularity type of event. The basis for valuing all assets of any kind anywhere in the world goes immediately to zero. That means dollars go to zero. Euros go to zero. Gold goes to zero. BTC goes to zero. Everything goes to zero.
No one should pretend they know what's on the other side of such a collapse, because they don't. There are no models, historical or hypothetical, which cover that particular scenario.
Bitcoin closely tracks global M2. Gold is not as predictable. There will be a decoupling from fiat for certain assets. Physical gold has never gone to zero since it was adopted as a medium of exchange and store of value. Bitcoin will not either. Electricity is not going to disappear everywhere all at once forever. There have been lots of currency collapses. This is why in great part central banks are hording gold. BRICS nations are attempting to decouple from the dollar system. Eventually they will get there.
No central bank has anywhere near the amount of gold reserves they need to backstop the amount of currency they have in circulation. If central banks actually have to revert their currencies to a sound basis the first thing they will have to do is a massive devaluation -- which if it happens before the fiat system collapses completely will trigger the complete collapse of the fiat system.
Everybody knows gold is "valuable". Without fiat money, however, no one has any means of saying how valuable gold is. How much gold is a bushel of wheat worth? How much gold is a barrel of oil worth? There's no reliable way to state that in a way the markets can process without the intermediary of a fiat currency.
As we learned in 2008, when the value of an asset is impossible to state with certainty, the value of that asset is in financial terms automatically zero.
The BRICS nations are two decades away at best from being able to launch a currency (I know de-dollarization afficionados are convinced that is just around the corner, but the technical considerations required for a transnational currency prevent that from happening quickly), which is about ten years too late for at least two of those countries: Russia and China--which also happen to be the two countries with the most egregious track records of money printing over the years.
“Kamala Harris refuses to acknowledge this reality. Corporate media refuses to pursue this reality. Yet this reality remains, obvious for everyone to see.”
Yes, and many of those ordinary people who head to the voting booths this November DO see that this issue is negatively affecting them, and will vote accordingly! You’ve got the data, Peter, and I wish you could just stuff your analysis directly into Powell’s face and confront him about it, just to see him hem and haw and dither about the reality. Even better, I wish you could confront Harris about it!
Someday, Peter, maybe your writing will help to end the Fed, and then historians will eventually wonder why our government ever thought we needed it in the first place. (I see you smiling now, thinking, “Ah, then I could die happy”.)
And by the way, a topic for you to analyze as time goes by is to what extent AI is causing joblessness, to what extent is it being blamed politically while it is actually immigration policy that is causing joblessness, and to what extent is AI creating new jobs. This is data we need to see accurately for future policy decisions. I know you’ll do the topic justice!
Dr K - excellent objective analysis per usual. Compare immigration numbers pre JB even the Obama and Bush years which generally were akin to Djt years and is appx 500k per year to appx 2mil plus per year, or 4x
And the impact change on things like
Direct funds via ngo as taxpayer expense and or State level funding think Oh or Fla or Texas or any similar
Housing stock and demand
Labor and wages
Crime and related influence on LE priorities and efforts
Other?
And for the Fed to ignore these oer these last 3 plus years is....quite telling.
Doth he protest (ignore) too much!
Imagine a staunch and unapologetic pro Trump Fed chair - would not she be naming the immigration impacts on our economy every meeting and as a legit impact on fed policy?
Wouldn't you? If allowed to speak freely. The elephant in the room no one can speak about.
Look the Fed and the government have two lousy options, both of which they created with stupid fiscal and monetary policies. They either let the economy collapse suddenly or they slowly devalue the currency. They won’t cut spending because they are afraid to say no to voters and special interests (donor class) who suddenly get less. Now obviously anybody outside the august chambers of the geniuses running things, who lives in the real world, would start to look to create efficiencies and cut the enormous waste. Who in the real world can lose hundreds of billions of dollars on a regular basis when audited and not go to jail? But these people have other imperatives driving their actions. OPM is a powerful drug.
So as a person trying to live, you need to overcome inflation, currency debasement, higher interest rates, taxation and it’s getting hard even for the upper middle class. One presentation I saw recently estimates the actual hurdle rate to get ahead of inflation/ debasement/ higher interest rates at about 15% per annum. Only two investment classes beat that over the last decade or so - Bitcoin and the NASDAQ. Everything else either treads water - S&P or is upside down.
Eventually currency debasement will likely get to the same place as collapse.
But nobody seems motivated to fix the problem because they put their self interest ahead of the nation. Practically every advanced country is in a similar situation to a greater or lesser extent.
A little push from here, a little shove from there, and the house of cards comes a tumbling down.
Well we’re gonna find out. I suspect when the panic selling starts, you’re right. But after the dust settles fiat will be gone and BTC will remain. I also have a suspicion that there may be some sort of debt jubilee and backing of currency with hard money - physical gold, BTC.
In any event, the current program is deteriorating and fixing the money is a big part of fixing the mess we are in.
What most commentators fail to appreciate about Nixon's closing the gold window in 1971 was that he didn't just unmoor the dollar from gold, he unmoored ALL currencies from gold.
The objection that DeGaulle and others had to the Bretton Woods system was that it was a de jure establishment of the dollar as a global reserve currency. All the major currencies of the time were established in relation to the dollar, not to gold. The only connection currencies had to a gold standard of any kind was through the dollar (the exception was the Swiss franc, did not actually ditch the gold standard until 1999).
At the time, other nations screamed like mashed cats--which prompted Treasury Secretary John Connally's infamous "it's your problem" retort. But they went along with it. And since that time the Euro area in particular has done MORE money printing than the US (not to mention Russia and China, which have inflated their currencies several orders of magnitude beyond anything even contemplated by the Fed). Ultimately the governments of the world decided that fiat was better than sound money.
Here's the thing: inflation has not tracked with the money printing. Not even ShadowStats data shows inflation tracking to money supply growth.
Here's the other thing: gold has not appreciated in any correlation either to money supply growth or inflation. If you look at BTC valuations, it also has not tracked to inflation.
What we are seeing now is a complete inversion of the traditional economic norm: instead of valuing dollars in terms of gold, we now value gold in terms of dollars. More accruately we value gold in terms of fiat currency (dollar, euro, et cetera). We value BTC also in terms of fiat currency. And we value fiat currencies in terms of each other.
When the fiat money system collapses, that's a singularity type of event. The basis for valuing all assets of any kind anywhere in the world goes immediately to zero. That means dollars go to zero. Euros go to zero. Gold goes to zero. BTC goes to zero. Everything goes to zero.
No one should pretend they know what's on the other side of such a collapse, because they don't. There are no models, historical or hypothetical, which cover that particular scenario.
Bitcoin closely tracks global M2. Gold is not as predictable. There will be a decoupling from fiat for certain assets. Physical gold has never gone to zero since it was adopted as a medium of exchange and store of value. Bitcoin will not either. Electricity is not going to disappear everywhere all at once forever. There have been lots of currency collapses. This is why in great part central banks are hording gold. BRICS nations are attempting to decouple from the dollar system. Eventually they will get there.
No central bank has anywhere near the amount of gold reserves they need to backstop the amount of currency they have in circulation. If central banks actually have to revert their currencies to a sound basis the first thing they will have to do is a massive devaluation -- which if it happens before the fiat system collapses completely will trigger the complete collapse of the fiat system.
Everybody knows gold is "valuable". Without fiat money, however, no one has any means of saying how valuable gold is. How much gold is a bushel of wheat worth? How much gold is a barrel of oil worth? There's no reliable way to state that in a way the markets can process without the intermediary of a fiat currency.
As we learned in 2008, when the value of an asset is impossible to state with certainty, the value of that asset is in financial terms automatically zero.
The BRICS nations are two decades away at best from being able to launch a currency (I know de-dollarization afficionados are convinced that is just around the corner, but the technical considerations required for a transnational currency prevent that from happening quickly), which is about ten years too late for at least two of those countries: Russia and China--which also happen to be the two countries with the most egregious track records of money printing over the years.
When the dollar collapses it takes Bitcoin with it, unfortnately. The way its traded it’s interwoven with fiat currencies.
Same thing with the NASDAQ.
When the fiat money system goes, everything goes.
That includes “paper” gold (which is the bulk of what is traded)
“Kamala Harris refuses to acknowledge this reality. Corporate media refuses to pursue this reality. Yet this reality remains, obvious for everyone to see.”
Yes, and many of those ordinary people who head to the voting booths this November DO see that this issue is negatively affecting them, and will vote accordingly! You’ve got the data, Peter, and I wish you could just stuff your analysis directly into Powell’s face and confront him about it, just to see him hem and haw and dither about the reality. Even better, I wish you could confront Harris about it!
Someday, Peter, maybe your writing will help to end the Fed, and then historians will eventually wonder why our government ever thought we needed it in the first place. (I see you smiling now, thinking, “Ah, then I could die happy”.)
And by the way, a topic for you to analyze as time goes by is to what extent AI is causing joblessness, to what extent is it being blamed politically while it is actually immigration policy that is causing joblessness, and to what extent is AI creating new jobs. This is data we need to see accurately for future policy decisions. I know you’ll do the topic justice!
Dr K - excellent objective analysis per usual. Compare immigration numbers pre JB even the Obama and Bush years which generally were akin to Djt years and is appx 500k per year to appx 2mil plus per year, or 4x
And the impact change on things like
Direct funds via ngo as taxpayer expense and or State level funding think Oh or Fla or Texas or any similar
Housing stock and demand
Labor and wages
Crime and related influence on LE priorities and efforts
Other?
And for the Fed to ignore these oer these last 3 plus years is....quite telling.
Doth he protest (ignore) too much!
Imagine a staunch and unapologetic pro Trump Fed chair - would not she be naming the immigration impacts on our economy every meeting and as a legit impact on fed policy?
Wouldn't you? If allowed to speak freely. The elephant in the room no one can speak about.