“I don’t want another one of your sullen whores using my medicine cabinet as a PEZ® dispenser.” – Archer
I once had a dream I was an owl. It was a hoot. (all memes this post, as-found)
The dollar. Since the end of World War II, it’s been the world currency. The reasons are fairly simple – out of the World War II mess, the United States was ascendent. The reasons, in retrospect, were obvious. It was the strongest economy in the world. It sat on (at that point) nearly limitless oil reserves, and was the undisputed technical world leader in getting oil out of the ground.
While not the preeminent world land military power (that would likely have been the Soviets at that stage) it did have the best planes and the best navy along with a short monopoly on atomic weapons. I believe, and this cannot be emphasized enough, that the United States at this point was also the world’s largest producer of PEZ® not long after PEZ™ was introduced to the United States in 1952.
Great Britain was in the midst of involuntary decolonization – two world wars had robbed them of their vitality, except for their international leadership in the production of pop music. That left the United States standing alone, except for France, which always likes to pretend that it’s still important and the Soviets, who had an economic system that create a shortage of sand on a beach.
I once helped that Wolverine actor, the Jackman guy, find his laptop when he lost it in Switzerland while filming a movie about a professional yodeler. I said, “Your Dell® lay here, Hugh.”
As I’ve mentioned in the past, there are huge advantages to having the world currency. First, you can print dollars, ship them overseas, and people send you stuff. If that’s the first benefit, I’m not sure that you really need a second benefit. It’s the equivalent of a six-year-old scratching “one candy bar” on a piece of paper, walking into a Wal-Mart®, and Wal-Mart™ giving him a candy bar in exchange for the piece of paper. I think Wal-Mart© has a special program where they give kids in Chicago candy, all they have to do is show a pistol.
Sure, they pretended that the dollar was backed by gold for a few decades, but those fictions always end. Still, during that time frame the United States built something else – a payment framework. Using this payment network, Saudi Arabia could quickly trade a million dollars it had received from selling oil for something more useful, like hot bimbos. Saudi Arabia quickly jumped on board with this idea, especially after one of their Kings got lead poisoning after the oil embargo.
I hear the biggest show in Saudi Arabia is “How I Met Your Mothers”.
Then, Ukraine.
For whatever reason, the people who do the thinking while Biden drools, reads things in real big print, and says random crap, thought it was a good idea to take Russia’s money. How much? $1 trillion. That’s enough to buy cell phones, track suits (seriously, those are Russia’s biggest imports) for almost every Russian with enough left over for enough vodka to fuel another offensive, but not enough to pave a road.
It was a pretty serious breach of trust. In my own personal business I try to avoid giving my money to people who promise that they’re going to give it back to me and then decide, “You know, I’m just going to keep this money for myself because . . . it’s Tuesday.” Admittedly, invading another sovereign state is a little more than it being “Tuesday” but the idea is that this is a weapon that can be used once if there’s an alternative system.
Sure, the Russians have lost $1 trillion, which is half of what their entire economy produces in a year. The damage was done, though, when everybody else looked around and said, “Huh, if it can happen to Russia, it can happen to me. I’m not sure that I like the idea that someone can take away all my cash . . . and has proven that they will do so.”
Is a British bank robber a quid-napper?
How much longer can we trade the dollar for candy bars? I’m not sure. Other groups have already started trading back and forth on systems other than the ones the United States influences.
To add difficulty to this, the dollars we shipped offshore to buy candy bars and oil and Chinese clothes are headed back to the United States and there’s actually a dollar shortage overseas as the dollars flood back here. Why are they headed back? Because the interest rates are headed up, folks overseas are shipping the dollars back here to take advantage of the higher interest rates.
If we lower the interest rates? Inflation kicks higher. If we raise them, dollars (which will cause inflation) head home and make all those dollars we’re printing right now worth a little less. If only those pesky Chinese had burned all the dollars when they sent us radar detectors and fishing rods and forks and ceramic garden gnomes.
But they didn’t. And neither did anyone else, though a cat broke several of my ceramic garden gnomes, so those are a loss.
I hear China’s running a currency special – buy Yuan, get Yuan free.
Beyond that, we have either unserious, mentally damaged, or downright dangerous leadership at virtually every level of national government, and A.I. starting to take a toll on some of the higher paid jobs in society. Sure, losing all those buggy-whip makers was tough in society, but I’m not sure what we’re going to do with all of the awful plumbers that used to be programmers.
Maybe they could mine coal?
Did I mention that we just had the second-largest bank failure in U.S. history, so the indication is that, perhaps, the banking system is rotten to the core?
It’s all fun and games until everyone sees that the press is just running everything on a script in collusion with the government. Then everything will change. Oops, guess not.
And maybe Russia is a diversion, you know, to keep the whole thing together while it’s all falling apart?
Next you’re going to tell me that PEZ® entering the Chinese market in 2017 was . . . a coincidence.
Are you not wildly entertained by the corn studded turd that is the third term of Fundamental Transformation!
These things happen when mediocre criminals in action lab creations start to believe the demigod tingle up the leg ballwashing press clippings.
Shh…let them believe in the Magic Soil and 1000 years of glorious TRANS-formation victories.
And Kamala will lead the charge on governing A.I.! When she’s sober.
John – – Nobody wants to have their property controlled by another who is deemed/proven to be untrustworthy.
Now we are seeing that the banks are untrustworthy and could fail sinking with one’s funds on board…..
So if you have any funds you don’t want the bank to sink and slink away with, move them into a credit union. While no human endeavor is foolproof, credit unions offer good protection because they are non-profit and are managed by account holders elected by the other account holders.
Thus, credit unions have no incentive to make risky loans or invest in stocks and bonds. They have no incentive to gamble using derivatives. They have no shareholders demanding dividends from profits.
Seriously, my purpose in discussing this point is so that your followers can see how much better their funds are protected at credit unions.
Thanks for the use of the John Wilder Soapbox !!
Bwa ha ha ha ha!
Sorry, I remember the 1990’s. Can you say, “S&L crisis”?
“Thus, credit unions have no incentive to make risky loans or invest in stocks and bonds. ”
How do you think the executives at the credit union make money?
What do you think the loan officers do when risky loans are mandated by law?
https://www.bankrate.com/banking/credit-unions/list-of-failed-credit-unions/
I prefer using my fidelity brokerage account as my bank account. Money market is paying 4.5% and can be used like a checking account. At least they aren’t making risky bets with your money and giving you fractions of pennies on the dollar. If MM mutual funds that are invested in T Bonds and cash go tits up then it really won’t matter if FDIC even could theoretically pay back all the money lost in bank failures. I don’t think dollars would be much good in a total US gubmint collapse.
I hope you are right, but I think the Fed will let the big banks swallow nearly everything.
Excellent analysis as always John.
30 years ago, maybe even 20, the US could have withheld the Russian money and there would have been no ramifications other than some grumbling? Now? It is relatively clear the US is in decline and barely has the ability to enforce some element of its will (and even that is fading quickly).
You can treat people pretty awfully, call them names, take their PEZ dispensers – and things can continue to function. But mess with their money and/or change the rules of the game arbitrarily to suit your purposes, and you have broken the unspoken contract. If people do not feel they have any chance of winning, they will look for another game.
And that is where we find ourselves now: with broken rules and other groups more than willing to make accommodations (good or bad) for alternative arrangements. And the more the concept grows, the more it will become popular – that quote from Star Wars “The tighter you grip, the more systems will slip through your fingers” was highly accurate and instructive in this regard. The US and its allies will double down on this policy. The next stage will be the stamping of feet and shouting at others to “do what we say, because”.
It should be delightful.
One almost throwaway from your article: “Great Britain was in the midst of involuntary decolonization – two world wars had robbed them of their vitality, except for their international leadership in the production of pop music. ” The US has done something more amazing: it has consciously robbed itself of its vitalilty.
Excellent observations. And, yeah, we have – our vitality seems spent in the face of amazing luxury. Hmmm.
Thinking machines?
Loss of the reserve currency?
I got nuthin’.
https://machciv.com/2022/03/03/the-ria/
Heheheheh! But did you write in Kamala being in charge of controlling A.I.?
True dat
Thank you!
Yes, the Russkies are today’s diversion, aka “The Current Thing”. With Red China/Formosa on the back burner.
There’s always a tail to wag the dog, right?
We are for sure going to find out, our homo navy is totally ready
I hear they already gave up on their drag queen recruiter. But they have plenty of Bud Light.
Here are some of my random neuron firings upon reading today’s topic ” The Fate of Nations”
“…the best navy”
https://www.dailymail.co.uk/news/article-12039863/U-S-Navy-turning-drag-performer-Harpy-Daniels-digital-ambassador.html
“…an economic system that create a shortage of sand on a beach.”
You can add sand to the list of commodities like oil, natural gas, meat, etc that Karl Strauss & the WEF wanna start controlling access to…
https://www.unep.org/news-and-stories/story/problem-our-dwindling-sand-reserves
…even tho there’s plenty of sand out there….
https://escholarship.org/uc/item/09q940zn
“…Why are they headed back? Because the interest rates are headed up, folks overseas are shipping the dollars back here to take advantage of the higher interest rates.”
Well, shuffling money around to chase higher interest rates is certainly behind our ongoing DOMESTIC banking crisis where regional banks are rapidly losing zero-interest-paid customer deposits. But the FOREIGN dollars are are being shipped back to the US (by foreign central banks selling off their US Treasury bond holdings) to GET RID OF THE DOLLARS ENTIRELY so they can’t be frozen like Russia’s dollar-denominated holdings were. FOREIGNERS are not parking dollars in high interest rate American financial assets, they are stuffing their local central bank vaults with gold purchased with the dollars they are shedding. That’s de-dollarization in a nutshell.
https://www.reuters.com/markets/commodities/central-banks-bought-most-gold-since-1967-last-year-wgc-says-2023-01-31/
If foreign central banks don’t want to buy rollover US Treasury bonds, and crashing regional banks can’t, that leaves ONLY THE FED to cover the US debt and deficit. Money Printer Go Brrr.
But we don’t gotta worry bout any o dat, cuz…
“…unserious, mentally damaged, or downright dangerous leadership at virtually every level of national government.”
http://themostimportantnews.com/archives/4-ways-that-joe-biden-could-get-america-into-a-nuclear-war
TL;DR:
“Have you ever looked at Joe Biden and wondered if this guy is going to get us all killed? “
Yeah, the last sentence is the scariest one.
When we went to China to adopt a child in 2004, we had to give the social office $3,000 in sequential, unused, $100 bills. So my wife and I stand there for an hour as we go thru the paperwork and we hand the lady the $3,000 wrapped in a rubber band and she turns, opens a very large rubber maid trash can, and tosses it in. It was like funny money to her, but I was looking in that garbage can and it was literally full of rubber banded $3000 wads of money. I was in the US office, so there were other offices like that with people from other countries as well. And they had to pay in US dollars as well.
We were there in February 2004 doing the same for the second time. Perhaps our paths crossed?
I guess soon enough your dollars will be Yuan in a million?
62% of all the dollars in existence are held outside the US until they aren’t
Gold will be Gold
Exactly.
Your power graph is flawed, the US fall and Chinese rise are not far enough along.
True.
‘I believe, and this cannot be emphasized enough, that the United States at this point was also the world’s largest producer of PEZ® not long after PEZ™ was introduced to the United States in 1952.’
Lord as witness, how I have longed and prayed for someone to appear in the world capable of tracking our national fustercluck to its root!
All the Science confirms that, yes, U.S. demise began SIMULTANEOUS with the Peak PEZ market of the early Fifties. From there production tailed-off until, as at present, the vast majority of Americans lack PEZ dispensers in their kitchens, living rooms, and bathrooms — a staple that you and I take for granted!
Few have your insight; fewer still, the cojones to lay the whole PEZ truth out there, and damn the consequences. Salud!
Peak Pez: Peak Political Power.
” … I’m not sure that I like the idea that someone can take away all my cash . . . and has proven that they will do so.”
Exactly the way I feel about paying income and property taxes.
Mark shoots, Mark scores!