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Sask | Yes, that is correct regarding hard assets. But people need to understand that is not how the world works right now.
I believe Trump has it right on the need for balanced trade, how we get there I don't know. But the status-quo is definitely not correct. Continuing the status-quo because no one has an alternative, while dismissing how the world worked prior to 1970 seems like a lazy approach to life.
We have to see if the current administration is full of crap, may very well be. But for me it is nice to hear at least one person on the planet say the status-quo is not acceptable.
The way the world works now is currency is created out of thin air and used to buy stuff. The currency is no longer linked or backed by hard assets. A country can literally produce nothing of value, print currency, and go purchase things that lead to prosperity. That is not how it was supposed to work. There is a small group of people who create this system and allow and manage it.
Remember when the privately run central bank was there to limit government spending? How is that working? Or a better question is why isn't it working that way?
It's because that club isn't there to serve the best interests of the people. That club is there to expand debt, and thus control.
Take any government jurisdiction, federal, state, city - any of them. Look to see if they have a bank account surplus or debt. If debt, is it expanding, and if it is look and see if there is any intention to pay it off in next 5 years. If not, then it is free money because no one is ever going to call in the loan. That is not how the people in control want their system working.
That free money creates distortion, and it is further amplified by whichever jurisdictions or countries use more free money to run their economy. If Chicago runs a huge debt, yet that government money created from free debt (it won't be paid back so it is free) flows into building bridges, or a teachers or city worker pension plan, then that free money is distorting that local economy. A gold plated pension plan puts more wealth than deserved into people's hands while also creating distortion in what other employers feel is a reasonable pension plan for their employees. Bridge builders have work that should not normally be available if the city did not have free money to buy with. And do this on a country level and the distortion in economy is even more significant.
Yes, currency creation should be backed by hard assets. But it isn't working that way. And various countries are using this tool intentionally. That creates unlevel field when one country trades with another.
There is a reason the principle of balanced trade has entered the discourse. I won't say how we get there. But the idea of "free trade" when a county is creating infinite wealth out of thin air to manage its economy has to die pretty quick. I see Germany just announced another massive debt expansion to manage and expand its economy - with no indication of paying off its past debts. Yet we will demand "free trade" with any entity based in Germany.
Yes, it will be hard for people to carry on without money created out of thin air to give them the goods they want. It is kind of expected to be the case. Kind of like a spoiled kid getting handed anything he wants and then saying no more. The alternative is keep giving the kid his free stuff. | |
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How many red flags do you need?
