Quote of the Day
The global reserves count of the U.S. dollar has now fallen to 59% in 2024, reported the Atlantic Council The U.S. dollar in reserves stood at 72% in 2002 and has been declining steadily in the last two decades. In 22 years, the USD declined 13% in the markets as developing countries are distancing the currency from their reserves. In no surprise, BRICS member China’s local currency, the yuan, rose 3% during the same period.
Vinod Dsouza
August 10, 2024
BRICS: U.S. Dollar in World Reserves Fall Below 60% (watcher.guru)
We live in interesting times. Prepare appropriately.
Foreign governments have reduced their holdings. OK, but where did they go?
Money doesn’t die, it just changes hands.
When finds it’s way into the price of goods and services is when we get to feel the real tax that inflation imposes.
That’s why politicians and bankers like it so much. And why people are taught to have such a short attention span.
You don’t know you’ve been robbed for 5-10 years.
Like Lucky Luciano said; “I joined the wrong mob.”
Governments are no different, and never have been. None of them.
Oh, there’s a way that money dies. If ‘money’ can be created from thin air to increase the available money supply through various debt-fueled stimulus programs, money can also be destroyed when someone goes to make a claim on that debt and the originator of that debt doesn’t have the reserves to make it good. Then all the other creditors to the debt-laden organization take a haircut. They thought they were owed $100M, but what they actually got was the FDIC’s insurance on their account and maybe $2M of their original deposit. It’s a hazard of the fractional reserve banking system, which is why in the last crash, there was such a scramble by the regulators to find banks that would absorb Washington Mutual and Lehman Brothers so the lack of foundation of the whole system wouldn’t be exposed.
This is separate from the US Treasury collecting old physical bills (Federal Reserve Notes) and destroying them, trying to balance the bills they print. Outstanding physical bills are still claims on the Treasury, since they have no expiry date on them, and having stacks of bills in a foreign vault, while you print new bills, is technically inflationary. But practically, if there is a physical stack of benjamins in a safety deposit box, but the last person that knew about it dies, is it money, or just green linen? Schrodinger’s cash, perhaps.
“They thought they were owed $100M”.
Minus interest. That money was created and put in circulation already. Not dead. Exchanged for collateral.
Chase just ended up with all the collateral Washington mutt had for their 100M.
Then went and whined to the government for more money. Which wasn’t a bail-out, it was an inflationary bail-in.
You can lose money on a bet. (Dead to you.) But somebody won that bet also. (Alive and partying.)
“Which wasn’t a bail-out, it was an inflationary bail-in”
Right, there was no actual principle to back the debt. All the creditors thought they had a $1T in the institution, but there was only $100M.
If the government and Federal Reserve hadn’t made inflationary money out of nothing to fill that hole, $900M would have just poof! disappeared. ‘Money’ would have died.
If bankrupt banks had been allowed to fail, and creditors take that haircut, there’d be a bit more seriousness about monetary policy. But the bailouts happen, the lessons aren’t learned, and now the monetary policy has bailouts baked in. The institutions are ‘too big to fail’ now because their failure would take the entire inflationary system, down with it. So the problem gets bigger and we’ve run out of any way a reasonable reconciliation can happen. So what happens is going to be non-linear and unreasonable.
But I think this is why every time Ron Paul said, “Audit the Fed!”, everyone else suddenly had other things to do. Nobody wants to look, because they fear if they look, poof! Trillions of inflationary dollars backing all this stimulus debt are backed by nothing. If there is a run on the Fed, all those fiat dollars that are claims on the Federal Reserve would be backed by nothing, and we’d all take a haircut.
“Shave and a hair cut, two bits?” Originally from a humorous song in 1915, “On the 5.15”. A gold dollar, or a other gold coin, used to be cut into 8 bits to make change. So, two bits is $0.25 of a gold dollar. But a 1915 gold dollar is worth $31-ish 2024 fiat dollars. In other words, our current dollar is worth about one quarter of one bit.
Agreed, but the inflation was in the issue of the credit in the first place.
If I borrow $100,000.00 to build a house. Money that was created from thin-air. That’s inflation. And I spread it out to contractors for my home.
It found a new home and so did I.
The investor’s expectation of return is pretty much wishful thinking for inflation.
If all the money in the world was a $100.00 that you made up from nothing. Then loaned it to me at 10%.
There would be a $100.00 dollars worth of inflation in the world.
But I could never return more than the $100.00 dollars to you.
Unless you made another $10.00 dollars I could get to pay you back.
No matter. The $100.00 dollars inflation is already out there in someone’s pocket.
Money don’t die. It just finds a new home. Yours, mine, someone else’s.
And Obama got it passed that banks will no longer get bail-outs from the government.
They bail-in. They get to steal whatever money is in their banks this time around.
What money you have in a bank is considered an un-secured loan to the bank.
Their on the hook for that amount. But you will be just like an investor without a contract.
Your money is as secure in a bank as having a homeless junkie hold it for you.
“If it’s not in possession, it’s not your money.”
That’s why they need WWIII and CWII to cover themselves this time around.
I predict they won’t be jumping out of windows as much as being thrown out of them this time around.
What cannot continue will not. The US Dollar can not continue in it’s current iteration. Therefore it will cease to exist as it currently is. If you aren’t prepared for that nasty reality life is going to get real ugly real soon.