the makings of an historic book in this piece. A book that needs to be written. Perhaps a Roman historian already wrote the book. The interplay of fiat and reserve asset is critical. As a frog, I feel cooked.
"Because it is indeed a confidence game. And the jig is nearly up" - a currency is 100% dependent on confidence, and when that confidence is undermined, the currency collapses and the country soon follows.
Deeply insightful John - please keep educating us.
The 'confidence' in the US fiat started to disappear after 1971 when foreign countries figured they better repatriate their gold or lose it. Most countries who stored their gold in the US have been repatriating it since then or are still trying to.
Gadaffi figured it out too, and was killed for trying to use gold too.
The bond market is also confirming the loss of 'confidence' even more.
The same countries repatriating their gold are not buying US paper debt any more either.
The 'deal' with JPY is another confirmation of loss of 'confidence'.
All 'confidence' fiat games eventually end badly, and that jig is definitely almost up for the USD. Smart 'confidence' has obviously shifted away from fiat debt towards gold.
Seigniorage has always gone with the monarch's power to mint coin right through Nixon's cutting ours loose from a tangible limited anchor, so it's harder to prove there is cheating. Whether the game is almost up and the revolt is at the gates, who can say? It's all relative. Lived with this condition for quite some time now, but then that's also relative, just my lifetime tiptoeing along the slack rope across the abyss, yes? I'm looking for more of your analysis and, if you can, any suggestions for relief, macro or micro both, please.
Hi Jay. This is the first of what I have outlined to be 12 letters on the impressively far-reaching aspects of this unusual/rare (almost unique) confluence/nexus of global reserve currency and fiat currency. In that process, there will be suggestions for relief, for sure. But I need to space these letters out, because although wicked important to so much going on now, there are other issue of import and acute interest too. I figure 2 or so per month, and then, when done, run them together on on place on the site as a sort of primer on the topic. If it is good enough. I'll try to make it so. Thanks for reading.
Excellent summary introduction. Everyone ought to understand this situation (along with a lot of other situations, like Keynesian "economics," "trade deficits" and other popular but almost always misunderstood general economics topics).
Central banks are dumping dollars and hoarding gold at the fastest pace in history.
the makings of an historic book in this piece. A book that needs to be written. Perhaps a Roman historian already wrote the book. The interplay of fiat and reserve asset is critical. As a frog, I feel cooked.
"Because it is indeed a confidence game. And the jig is nearly up" - a currency is 100% dependent on confidence, and when that confidence is undermined, the currency collapses and the country soon follows.
Deeply insightful John - please keep educating us.
The 'confidence' in the US fiat started to disappear after 1971 when foreign countries figured they better repatriate their gold or lose it. Most countries who stored their gold in the US have been repatriating it since then or are still trying to.
Gadaffi figured it out too, and was killed for trying to use gold too.
The bond market is also confirming the loss of 'confidence' even more.
The same countries repatriating their gold are not buying US paper debt any more either.
The 'deal' with JPY is another confirmation of loss of 'confidence'.
All 'confidence' fiat games eventually end badly, and that jig is definitely almost up for the USD. Smart 'confidence' has obviously shifted away from fiat debt towards gold.
John Hunt is a welcome contributor to the site .Keep up the good (Analytical ) work !
Seigniorage has always gone with the monarch's power to mint coin right through Nixon's cutting ours loose from a tangible limited anchor, so it's harder to prove there is cheating. Whether the game is almost up and the revolt is at the gates, who can say? It's all relative. Lived with this condition for quite some time now, but then that's also relative, just my lifetime tiptoeing along the slack rope across the abyss, yes? I'm looking for more of your analysis and, if you can, any suggestions for relief, macro or micro both, please.
Hi Jay. This is the first of what I have outlined to be 12 letters on the impressively far-reaching aspects of this unusual/rare (almost unique) confluence/nexus of global reserve currency and fiat currency. In that process, there will be suggestions for relief, for sure. But I need to space these letters out, because although wicked important to so much going on now, there are other issue of import and acute interest too. I figure 2 or so per month, and then, when done, run them together on on place on the site as a sort of primer on the topic. If it is good enough. I'll try to make it so. Thanks for reading.
Excellent summary introduction. Everyone ought to understand this situation (along with a lot of other situations, like Keynesian "economics," "trade deficits" and other popular but almost always misunderstood general economics topics).