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In any alternative media space, you are sure to find much talk about US dollar dominance, as well as optimistic forecasts of its imminent decline. This is also true in the radical right, where nationalists pine after an end to US imperial hegemony and the rise of a more multipolar world.
Often though, this hope is little more than wishful thinking, with unlikely challengers to US power much overhyped. This is especially true concerning US dollar hegemony, a topic that is ripe for misunderstanding at the best of times.
It’s important to keep in mind that people have been forecasting the decline of the dollar ever since it attained its status as global reserve currency. As far back as 1960, the economist Robert Triffin was warning of an “imminent threat to the once-mighty US dollar”. Understanding the reason for Triffin’s pessimism, and why it turned out to be misguided, is crucial to understanding today’s global monetary system and the enduring dominance of the dollar.
Triffin’s concerns were more informed than most: his “Triffin dilemma”, as it came to be known, highlighted an inherent problem with a country’s national currency also serving as the reserve currency of choice for the international system. The country supplying the world with the reserve currency has to produce a surplus of money, thereby creating a trade deficit. In other words, the supplier country needs to be continually losing money to fill up the reserves of other countries and make the currency a low-risk option to hold as a reserve. But if the supplier country becomes too indebted to the rest of the world in this scenario, then its currency ceases to be such a low-risk asset, and that’s the dilemma.
After World War II, the US sent lots of dollars abroad through the Marshall Plan, military spending, and the American middle-class importing lots of foreign goods. So how did the domestic US dollar get around Triffin’s dilemma? It didn’t.
Enter the Eurodollar
Triffin’s dilemma was especially a problem for the US dollar because it was backed by gold. After all, what would happen when the world needed more dollars than US gold reserves could back? Much like the kind of collapse that would happen if everyone tried to withdraw their money from banks at the same time, the whole system faced implosion if the US could not keep its foreign dollars backed up with gold.
The standard story is that this problem was resolved in 1971, when Richard Nixon ended the Bretton Woods international system and finally decoupled the US dollar from gold. But by this point, private banks had already long replaced gold exchange and quietly adopted a new form of exchange, extricated from any reserves or real currency, this was a truly global, offshore economic system outside the purview of central banks. This was the Eurodollar system. In this context, “Euro” is used as a synonym for “offshore” rather than referring to actual euros. So, the Eurodollar system is the shadow, offshore money system denominated in US dollars.
No one is really sure of how the Eurodollar system emerged (more on that later), but by the late 1950s there had been a huge growth in US dollar deposits in European banks, mostly in the City of London. With pre-war practices, these deposits would have been remitted to the central bank or deposited to the banks’ accounts in the U.S., but gradually, banks began to use these dollar deposits to issue loans denominated in US dollars. By 1959, the economist Paul Einzig reported that
The Eurodollar market was for years hidden from economists and other readers of the financial press by a remarkable conspiracy of silence. I stumbled on its existence by sheer accident in October 1959, and when I embarked on an enquiry about it in London banking circles several bankers emphatically asked me not to write about the new practice.[1]Einzig, Paul. “Foreign dollar loans in Europe.” (1965).
Britain’s economic goal of making London a center for international financial capital manifested in deregulation and comprehensive secrecy protections; this gave the city a competitive edge against other European countries, and put it and its web of British offshore territories at the very centre of this emerging system.
Since the election of Margaret Thatcher’s Conservative government in 1979, Britain has undergone a great experiment. Economically, the UK became the exemplar of neoliberalism in Europe. Politically, the UK has quietly transitioned to a postnational state, undergoing one of the greatest demographic transformations in the West.
As the Eurodollar market exploded, it became the lifeblood of the global economy, quickly fulfilling a need banks had for an international currency system. Banks could now transact rapidly and efficiently across countries and continents without the need of a physical currency, an innovation that helped unleash economic activity. The Eurodollar system functioned like an early cryptocurrency, existing as a digital ledger and communications network rather than a traditional currency.
Driving the global economy is a kind of bankers virtual currency, created by and used to satisfy the demands of banks, a series of claims and liabilities exchanged between banks to meet their monetary needs. How can you travel to Indonesia and make an instant withdrawal from an ATM, withdrawing from your local bank back home? Only with a vastly complex and efficient communications network connecting the global banking system.
The Eurodollar was the emergence of this system, and central banks have little control over it. For all the scare-mongering from libertarians about “Fed money-printing”, it is international bankers — outside the regulations of the US Federal Reserve — who are the ones in control of creating the US dollar supply on international markets. Big commercial banks create Eurodollars using the offshore system without the backing of the Federal Reserve. This is done through fractional lending, where dollar deposits are used as collateral to loan out a higher amount of dollars.
Again: private banks create money out of thin air by creating debt
Discovering money creation rests with private banks is a revelation that tends to shock people and send them into a state of denial — surely the state would not outsource something this fundamental to private actors.
But don’t take my word for it, a source as good as the Bank of England wrote in a report titled “Money creation in the modern economy” that:
Most of the money in circulation is created, not by the printing presses of the Bank of England, but by the commercial banks themselves: banks create money whenever they lend to someone in the economy or buy an asset from consumers. And, in contrast to descriptions found in some textbooks, the Bank of England does not directly control the quantity of either base, or broad money. Of the two types of broad money, bank deposits make up the vast majority – 97% of the amount currently in circulation. And in the modern economy, those bank deposits are mostly created by commercial banks themselves.[2]McLeay, Michael, Amar Radia, and Ryland Thomas. “Money creation in the modern economy.” Bank of England quarterly bulletin (2014): Q1.
So international bankers have created a shadow money system, with the Eurodollar system functioning as a kind of “dark energy” of the global economy, ever-present but unseen, something which the US Federal Reserve or any other central bank can do little to control. In fact, no one even knows how much money exists in the Eurodollar system, with estimates measuring it in anything from tens to hundreds of trillions. As the economist Fritz Machlup once told a meeting of his colleagues:
We don’t even know enough about the Eurodollar market to say that it should be controlled.[3]Trestrail, Richard W. 1972. “The Eurodollar Obsoletes the Definition of Money.” Financial Analysts Journal 28 (3): 55–63. doi:10.2469/faj.v28.n3.55.
If you want to visualise what this shadow money system looks like, this is an attempt at illustrating all the instruments involved in the supply of the US dollar:
Still confused? You’re not alone. If this illustrates anything, it’s that the federal reserve and central banking is just a small part of the story. This enormously complex web developed over decades through private institutions, satisfying the need for a truly global money system unconstrained by national barriers.
But in the process of decoupling the dollar from Federal Reserve reserve control, bankers have given themselves the power to create unsanctioned and unregulated money. This translates to enormous power to override national government’s monetary policy and fulfill many of the roles most people assume central banks and their governments are handling:
Because Eurocurrencies give private financial institutions the unrestricted ability to expand the availability of a particular currency, the country whose currency is the target of the Euroinstrument no longer has exclusive control over its money supply.
…
Furthermore, the lack of reserve requirements on Eurodollars creates a potentially infinite money multiplier, potentially leading to an infinite degree of inflation, all without the input of the Federal Reserve or the U.S. Treasury. Thus, the power to control the number of dollars (or dollar-equivalent instruments) in the market has been taken out of the exclusive control of U.S. authority and diffused among foreign banking institutions.[4]Fowler, Stephen A. “The monetary fifth column: the eurodollar threat to financial stability and economic sovereignty.” Vand. J. Transnat’l L. 47 (2014): 825.
Discussion around economics is still heavily focused on central bank monetary policy and government programs like Quantitative Easing, which helps maintain the illusion that it’s still accountable, elected representatives with the final say.
It’s understandable we are biased to focus on government institutions: it has always been understood that monetary sovereignty is a prerequisite for political sovereignty. But it is now clear that governments have quietly surrendered a great degree of monetary sovereignty to the private interests running the international banking system — one of the most significant and revolutionary political changes ever, yet one hardly discussed.
It’s shocking to discover the scope and influence of this system, and to discover everything presented here has been out in the open for years, strangely ignored or overlooked by popular economists, financial analysts and politicians alike. Yet some esteemed economists like Paul Einzig and Milton Friedman did identify and study this system, and both also wrote of a grand “conspiracy of silence” by the global banking cartel to hide its existence. Since most economic analysis still ignores it, we are left with an always partial view of how the economy functions.
Why the dollar isn’t going away
There is another important realisation that comes with understanding the shadow money system: the Eurodollar is the real global reserve currency. The emergence of the Eurodollar system was an emergent innovation, coming from the many players involved in the global financial system seeking the maximally efficient form of money to handle their business. Understanding this helps us understand why it will be so hard to dethrone the dollar from its dominant position.
Imagine a world without the dollar. Suppose a German manufacturer needs to import raw materials from Brazil. The Brazilian exporter prefers to be paid in Brazilian reals, while the German importer has funds in euro. Only, there isn’t much from Europe the Brazilian company is interested in spending its new euro on, and constantly exchanging currencies can be costly and time-consuming.
However, with the Eurodollar system, the German importer can use its euro deposits to create a Eurodollar deposit in a German bank. This Eurodollar deposit can then be transferred to a Brazilian bank, which converts it to Brazilian reals and pays the exporter. The Brazilian bank can hold the Eurodollar deposit or use it to fund its own Eurodollar lending activities. Everybody wins! (Or so it must have seemed to the people inventing this system.)
Now imagine a government or governments trying to replace this. There are decades worth of highly complex and interwoven technological arrangements that have made this system function seamlessly. The dollar retains its strength because there is a constant demand for US Treasury securities backing this system.
Looking at how financiers are treating these securities, the dollar looks more secure than ever: US Treasury data reveals the foreign demand for these securities has massively increased in recent years. Holdings of long-term US Treasuries by private foreign investors jumped about 52% over the past three years to $3.4 trillion, for the first time overtaking the holdings of central banks.
Notice that the story here is not about US aircraft carriers or puppet regimes, but the private interests of the bankers that make up this system. A lot of dollar-doomers make a case that is all about geopolitics. The US is an ailing empire they say; it has a large and growing list of enemies, as well as potential challengers on the world stage like China, and we are entering a multipolar age where the US cannot dominate the world’s affairs like it did in the 20th Century. That may all be true, but it doesn’t make the Eurodollar system any less efficient for the global banking cartel.
China has put much effort trying to make its yuan a viable alternative to the dollar, and for all that, less than 3% of the world’s foreign-exchange reserves are denominated in yuan. By one estimate, the dollar is a part of 88% of all international transactions, the euro 31%, while the yuan is involved in just 7% (more than one currency can be involved in a transaction.)
If China wanted to make the yuan a true global reserve currency, they would need to embrace massive financial deregulation and abolish their currently strict capital controls, in order to allow massive inflows of foreign held currency and yuan into China. But China needs to maintain its strict financial regulation for domestic economic success, and political stability. China is unlikely to ever decide to abandon the statist model it has followed for decades just to make itself a better hub for the international financial system.
Some have touted BRICS, of which China is a member, as potentially leading the way in establishing an alternative monetary system. On paper, this looks more promising: BRICS countries have 42% of the world’s population, and an estimated 37% of the world’s GDP.
Could BRICS go about establishing a currency? Presumably, it would need a central bank, and presumably that would be centered in China, representing an unacceptable loss of sovereignty to other countries in the alliance, especially India, with whom it has ongoing territorial conflicts. The idea of a “BRICS coin” has been floated a lot over the years, either backed by gold or fully digital. But just last year, the head of BRICS’ New Development Bank made it clear there are no immediate plans for the group to create a common currency.
Even if BRICS were willing to put aside their disagreements and commit to a BRICS coin, it’s hard to see what competitive advantage it would have over the current system. A gold-backed currency? Bankers abandoned gold and embraced the Eurodollar system in the first place because gold-backed currency was a hindrance to their activities.
What about the “R” in BRICS? Perhaps Russia’s fortunes point to a potential alternative to dollar dominance. After all, since Russia’s invasion of Ukraine, the US government has weaponised the financial system in ways previously unseen. Is this not a display to the world of the precarity of relying on the good graces of America to sustain your financial system? Many reasoned that if the United States overplayed its hand sanctioning Russia, this is the lesson the rest of the world would take, and then it would only be a matter of time before enough interested parties conspired to take down the mighty dollar.
The most headline grabbing sanction against Russia came when the US and its Western allies invoked what some analysts called “the nuclear option”, and colluded to take Russia off of SWIFT (Society for Worldwide Interbank Financial Telecommunication). This was highly significant, as SWIFT is used by banks worldwide as a kind of instant messaging service. President Biden promised that this would “ensure that these banks are disconnected from the international financial system and harm their ability to operate globally.”
With the basic understanding of the US dollar as something strictly under the control of the US government, many assumed they could just deny Russia access to the dollar by cutting them off from the SWIFT system. But despite the high-profile deplatforming, Russian banks suffered little more than an inconvenience from being denied access to SWIFT, because of how effective the Eurodollar system is.
Eurodollar economist Jeffrey Snider summarised the problem with this attempt at deplatforming the Russian economy:
SWIFT constitutes very little insofar as the inner workings of the offshore banking network is concerned.
…
Deprive some of Russia’s institutions their ability to message to correspondents using SWIFT and they’ll simply communicate (how’s that for more irony!) with them some other way (including just picking up the phone) because the offshore correspondents are still there. They will continue to conduct their monetary business regardless of the method payments requests are sent and received.
Ironically, the very fact the US government could do so little to hinder Russian banks’ access to the Eurodollar market shows why it is so effective, and why the dollar will keep its position for the foreseeable future.
This takes us back to the start of this story, when the Eurodollar market emerged under shady and secretive circumstances in the city of London. I wrote no one is really sure how the Eurodollar emerged, but the most likely theory is that the real origin actually lies with the Soviet Union.
In 1956, the Soviets were also in the position of fearing international sanction for invading a smaller neighbour. After they crushed the 1956 rebellion in Hungary, Soviet officials feared the US would target their holdings of dollar deposits in American banks.
In response, the Soviets withdrew their dollars and moved them to two Russian banks based in Europe: Commercial pour L’Europe du Nord (BCEN) in Paris, and the Moscow Narodny Bank in London. Using those dollar deposits, these Russian banks may have become the first lenders in the global Eurodollar market.
On February 28, 1957, the Moscow Narodny Bank in London lent out $800,000. This modest sum was borrowed and repaid entirely outside the American banking system — or any centralised banking system. Bankers had just discovered an amazing innovation. BCEN in Paris also took some Narodny dollars and lent them out. The Paris bank was known by its telex name EUROBANK, and that, supposedly, is how dollars deposited in banks outside the US came to be known as “Eurodollars”.
And so, in one of the great ironies of history, the 20th Century’s great communist regime sparked an innovation on the financial markets that greatly expanded the power of capital and moved the activities of bankers beyond the scope of governments.
The Eurodollar system became so dominant because of innovations from people trying to avoid US government control of their dollars, and that’s precisely why the system is so resilient — to alternate currencies, to geopolitical shocks, and to the US government itself.
Nothing lasts forever, but for now, global dollar dominance is on pretty solid ground.
Notes
[1] Einzig, Paul. “Foreign dollar loans in Europe.” (1965).
[2] McLeay, Michael, Amar Radia, and Ryland Thomas. “Money creation in the modern economy.” Bank of England quarterly bulletin (2014): Q1.
[3] Trestrail, Richard W. 1972. “The Eurodollar Obsoletes the Definition of Money.” Financial Analysts Journal 28 (3): 55–63. doi:10.2469/faj.v28.n3.55.
[4] Fowler, Stephen A. “The monetary fifth column: the eurodollar threat to financial stability and economic sovereignty.” Vand. J. Transnat’l L. 47 (2014): 825.
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Whatever else Margaret Thatcher might have been, she was opposed to massive black/brown immigration into the UK.
Under her tenure, Commonwealth immigration into the UK was reduced to a trickle, and some rather stringent anti immigration Acts were passed.
The author left out the part where Russian Central Bank reserves were frozen. He talks about SWIFT but never mentions CB reserves.
What’s the advantage of not having your reserves in USD? Well, they can’t be simply frozen or stolen by the US if they’re not in USD. That’s a pretty big advantage. You don’t want to keep your reserves in a reserve currency that doesn’t guarantee safety of your reserves.
The author talks about demand for US Treasuries, but doesn’t mention that it’s America’s vassal states that are buying these treasuries. Of course the US can have its vassals take the fall for American interests. There will always be US dollar hegemony in the Judeo-American imperial territory until the empire collapses one day. It’s the worldwide hegemony that is in question.
Let me quote some articles by Paul Craig Roberts.
Price inflation is everywhere. The worlds various scripts are losing value rapidly due to the success of the banking system’s ability to create currency from nothing. It doesn’t matter how script is instantiated from the average person’s perspective. Only the finance types derive value as they maneuver within that system. The average person feels the effect of money from thin air in the prices they pay for goods and services while their savings dwindle in purchasing power.
That scam is now so large with debts unpayable that all the various mafias need a reset. The BRICS machinations are just more of the same, with a hint of gold as a stabilizing force, but each player in that system is convinced he will be the best cheater until that new and improved scam also succumbs to worthless script.
As long as there are national currencies, the fraud will continue in one guise or another. The average person is too ignorant to understand that hard money is the only possible solution to gov’t (mafia) profligacy and the entire banking fraud.
Wow that’s a lot of gibberish. I’m not sure if this guy is serious. He seems like someone in middle school who read some auto repair manuals and was blown away by the inconceivable complexity combined with subtle incompatibilites and tried to come up an interesting story about how complicated it all is.
The international banking grid is not particularly tied to the USD. Trading in USD does not require constant creation of USD– the money isn’t flowing into a sinkhole. It is not “costly and time-consuming” to use multiple currencies. The creation of money “out of thin air” by commercial banks is extremely highly regulated and there is nothing arcane going on there. (but see John Titus Best Evidence to learn all about it
]https://www.youtube.com/@BestEvidence]
The USD is used for pricing assets and securities it because it is understandably perceived as the most stable currency (instrument of value storage and exchange) which also has very high liquidity, and right now the ostensible alternatives– the EUR, RMB, UKP and JPY– aren’t making any sort of compelling case to make anybody jump to them, although doing so would not technically be difficult.
The Russia thing has created skittishness about the “SWIFT” system, and an alternative is a good idea, but there’s no reason that system shouldn’t or wouldn’t also primarily use USD.
The most sound banking system in the World is the Russian Central Bank, which additionally is the securities and exchange regulator. It has maintained a fiscal policy that cannot be idealized by academic theories and pet formulas from lesser bureaucrats with less talent, aptitude and intuition. In addition to raw courage. Run by a Tatar woman, raised in a predominately Muslim country, the Ruble is backed by gold and commodities and floats on the Intenational Financial Markets. Perhaps Russia is the singular country where wage increased yearly exceed inflation-which is the result of demand exceeding supply. That is, a severe labor shortage in an expanding economy of 3+% growth per year.
This author is Western/JUSA centric in his-what he thinks-is a catholic and comprehensive description of financial affairs in breadth. All of this is past expiration. The Bank of Russia governor does not like automatic State involvement as reflex to the vagaries of public finance. She prefers funds raised for capital expenditure be raised by issuing debt instruments (bonds, private investment, stock, etc). The BOR is the most independent central bank in the World. In the space of V. V. Putin and the Siloviki, it takes a very strong and assured person to chart a course with commitment and resolution.
https://timesofindia.indiatimes.com/world/europe/elvira-nabiullinas-role-revealed-meet-the-economic-strategist-behind-putins-war/articleshow/108970595.cms
What I find exceptional and excellent about her is her process of evaluation, analysis, and action. Simply, she resembles a working engineer in her methodology and feedback process. Not only a technical genius, but like a surgeon, wades into the real and tangible and straightens things and people out.
So, the world’s actual financial system is based on Soviet era banks creating the Eurodollar. Mr. Chekov would be so proud.
Actually, 90 years ago, people in Germany imagined a world without the pound sterling. They began trading commodity for commodity, and it caused a war. Seventy years later, some smart-ass in Venezuela tried to repeat that with the dollar and was dealt with in a more sinister way.
The Eurodollar is firmly backed by the US military/industrial/congressional complex and its North Atlantic Terrorist Organization subsidiary.
The fact is the people of the world have sold their soul for the worship of mammon.
The Palistinians are being slaughtered daily and everyone pretends to find other diversions so as not to be accused of supporting genocide.
The arab states pretend indignation as they rub their greedy fingers togeather at the thought of their cut of the Palestinians gas that they’re been promised by the “diplomacy” if they do nothing and allow Gaza to cease to exist.
These are the facts…the devil has brought the world of humanity…its only hell from here on people.
The Founding Fathers of this country understood that too.
The Trump assassination attempt demonstrates how easy it is to hijack a system to work for malevolent efforts in a hierarchical structure.
The secret service works on the same pyramid structure that all modern institutions do. You can look at the modern society as a machine, the institutions have a particular job that adds to the functioning of a modern society machine.
So what went wrong in Pennsylvania? Nothing, each part of the Secret Service did it’s job…except one…that’s all it takes in a hierarchical system for the machine to fail…one part was compromised.
You see this phenomenon in the Nuremberg trials after WW2, most on the stand claimed they were following orders…and they were, its just these cogs in the machine never knew what the machine was doing…it wasn’t their job to know this.
To find the offending piece in the machine you have to find the contradiction in the narrative told by the pieces of the security machine. Once you find the contradiction you then have to look for weaknesses in the pieces to see if they can be bent with a little effort to a certain way.
As in JFK assassination the compromised pieces are usually eliminated before they can be bent the wrong way for the conspirators, if I were the bent piece in Pennsylvania then I would be looking for a deal…quick!
The dollar will be “strong” until it isn’t. That is to say, if people truly KNEW that imminent collapse was coming, it would already be happening.
There is indeed tremendous inertia, nevertheless, the strength of the dollar is fundamentally THE FORCE OF HABIT.
Western economies will continue to decay and decline and no amount of dollars can stop it.
In time, alternatives to the dollar will gain popularity. It may take many years but the pace will surely pick up as fewer and fewer goods are to be had with dollars.
You can still pay a few thousand to people in central Asia to carry out suicidal terror attacks.
Is the world going to run short of desperate primitive people in backward countries willing to slave or do anything for a few ZOGBUX? Verily, it will.
Well, it’s very simple. The reason why the EURODOLLAR system has more US dollars circulating around the world outside of the US is due to the fact that since the 1950’s, the US has been a TRADE DEFICIT country.
What does this mean? There’s two types of countries on planet earth. There’s trade deficit countries and trade surplus countries. Trade deficit countries import more than they export and must borrow money. Trade surplus countries export more than they import and earn a lot of money.
Since global trade since WW2 was all done in US dollar, the US became more powerful as it ran up a HUGE TRADE DEFICIT with the entire world. What that means is the US imports more than it exports, and pays for the difference by printing US DOLLAR PAPER money. So the rest of the world get US DOLLAR PAPER money and the US gets the manufactured goods generated by the rest of the world. Get it?
Since the US gets to print US dollar from scratch, they never run out of US dollars. Trade deficit countries have no US dollars and must borrow US dollars from trade surplus countries. The entire global debt of money lending and borrowing and investing is all done with US dollar.
That’s why the US dollar isn’t going away due to the EURODOLLAR system. But it will diminish with time.
THE US IS THE ONLY COUNTRY IN THE HISTORY OF PLANET EARTH WHERE IT GETS RICHER AND MORE POWERFUL AND MORE PROSPEROUS AS IT RAMPS UP LARGER AND LARGER TRADE DEFICITS WITH THE ENTIRE WORLD. BECAUSE THE WORLD GETS US DOLLAR, THE US GETS THE GOODS. GET IT?
The Chinese Yuan cannot be the reserve currency because China is a trade surplus, industrialized economy. It exports finished manufactured goods, not PAPER YUAN money. IN order for the Yuan to challenge the DOLLAR, China would have to transition to a trade deficit, financialized economy and export a massive amount of YUAN and import all the manufactured goods produced by the rest of the world and do it for 50+ years as a TRADE DEFICIT country to catch up to the DOLLAR. Get it?
As usual, the Soviets are blamed for the creation of the fraudulent system of creating money out of thin air, but everyone knows that money out of thin air is linked to the creation of the dollar without backing in 1971 and that this made possible infinite credit in that currency as well as lowering the interest rate by lending money without it being anyone’s property, thus taking the Western economy out of the post-Vietnam crisis.
Steve Keen stumbled upon this years ago. He used to be a typical economist until there was some trial he called up as an expert witness to and in the course of it he looked at the levels of consumer debt in Australia. (This is pre-2008) He found they had just kept going up. He then found they also just kept going up in most other countries, particularly in the Anglosphere.
Long story short he came to realise that the idea taught in textbooks and taught to children, that banks take deposits and pay you interest on your savings from some of the profits they get from interests on loans they issue using your deposits can’t possibly be how the world works.
Afterall, when has a profitable bank ever be unable to issue as many loans as they want due to a lack of deposit funds left to loan out? Never. It has never happened in the modern era. If they had either to go to their deposits or to central banks first for the money before making loans the global liquidity system, particularly for speculative whales like investment banks would grind to a halt.
Instead banks issue loans which by 2008 they did with little or no interest as to how small the “fractional” real money they had was and then ask the central banks to issue them money to cover them.
This “discovery” led him to become quite famous. Which just sums up how useless economists apparently are.
Invade the world, invite the world
A good article, if only because it brings into question the common assumption held within certain groups ( eg ” hard money” investment advisors, anarcho-capitalists, “Austrian” economists etc ), that the $US’s reign as reserve currency of the world is, “inevitably”, “definitely”, coming to its end right now, or in the near future.
However the author then makes the mistake of making the exact same intellectual error/assumption, that is, he then incorrectly assumes that the $US is _not_ inevitably doomed to fail in the short to medium term.
However, the plain fact of the matter is that neither near, medium or long term future economic events can be reliably predicted by _any_ group, system or individual, as I have repeatedly tried to point out in my own blog posts over the years, and, that with specific regards to the possible demise of the $US, neither its future demise or non-demise can be reliably predicted, and, that therefore, the prudent saver/investor must somehow be simultaneously protected against at least 2 possible and opposite economic scenarios, not just one or the other.
In conclusion:
The most damaging (and therefore dangerous) assumption made by the average saver/investor is that the economic future _can_ be reliably predicted ( by themselves, the government, bankers, or by an investment advisor, or an economist or similar).
Regards, onebornfree
onebornfreesfinancialsafetyreports.blogspot.com
Maybe the once mighty dollar is not going anywhere, it’s not getting any stronger either:
“According to historical data, the US dollar has experienced a significant decline in value over time. Since 1913, when the Federal Reserve took over the US banking system, the dollar has lost over 96% of its purchasing power.”
Purchasing power is what matters to 96% of us.
The statement was meant to be sarcasm but if what the author says is true then fractional reserve banking may be to blame for money creation. If all loans are ledger statements not backed by deposits who needs a money printer?
“the system is so resilient — to alternate currencies, to geopolitical shocks, and to the US government itself.”
The system responds directly to it’s managers: If they want the dollar to continue, it will continue. If they want it to collapse, it will collapse. They have long experience all over the world in creating massive booms and massive crashes. Netanyahu was recorded once bragging about how when they have sucked America dry they will throw her away. The dollar will last as long as the Israelis want it to last (unless the Americans manage to grab back control of the US).
Very important point about how money is created mostly by private banks. I think most people know it instinctively, but it’s important to keep repeating it. Control of money creation is one of the biggest scams around.
What is not mentioned here and what Jeff Snyder never mentions is that the Federal Reserve is a private corporation owned by old money oligarchs.
Jeff will lead you to believe the Fed is always wrong and always too late to affect markets. He believes they are idiots as do all critics of the Fed.
Nobody ever seems to consider that they are acting in the interests of their shareholders.
Right now, the Fed has raised interest rates supposedly to suppress inflation.
But the “inflation” has actually been caused by supply side interruptions rather than demand for goods and services. I have little doubt that these supply side interruptions are also a gift from the banks’ owners.
The inverted yield curve demonstrates this perfectly well.
So having held interest rates near zero for a decade and allowing the everything bubble to inflate, they are now pretending that they have to fight inflation by suppressing demand. What they are actually achieving is to put the thousands of small banks which they don’t own into an insolvent position and as they fail, their business is gobbled up by the banks they do own.
Not to mention the collateral damage.
The Federal Reserve controls the US Dollar.
And the Jews control the Federal Reserve- hence the financial world. Why everyone prostrates before them.
http://biblicisminstitute.wordpress.com/2015/07/28/how-the-ashkenazi-jews-conquered-the-west/
Well, that’s a good explanation of things.
Says you, but we haven’t any hard data backing that statement.
Video Link
I question the overall message of this article, which is that the FED and the USA Treasury are not in control of this system, and thus the PEOPLE who control the FED and the USA Treasury are not in control.
Just the name ‘shadow banking system’ is a red herring, because though it may be in the shadow to you and me, it’s NOT in the shadow to THEM (see above for ‘them’).
Most Eurodollar accounts for USA banks are in those mythical fantasy fake places in the Caribbean. So who allows that to happen? Are we to imagine that the FED and the USA Treasury just wring their hands and so ‘oh, it’s impossible to control those guys! they just do whatever they want! boo hoo hoo!’.
No way. Of course. The FED and the USA Treasury ALLOW or even PROMOTE this so called ‘shadow banking Eurodollar System’. And all they have to do to change it is make a law or a regulation, but they will not until THEY WANT to, because the bankers control the politicians. So in fact there is nothing shadowy about the system, it’s just a specific aspect of the overall control of the USA political system by financial capital.
When the financial power based in the USA decreases X amount in relation to the financial power in Russia/China and the BRICS+ there will be inevitable changes in how the FED and the USA Treasury regulate and legislate the USA banking part of the so called ‘Eurodollar Shadow Banking System’, and this will obviously affect the system as whole. And other countries ‘have a vote’ also.
We can imagine, for example, as a result of the weakening of the USA financial power, a ‘EuroEuro System’ replacing a ‘EuroDollar System’, IF, and it’s a big IF, but not out of the realm of possibility, Germany and France turn a friendly face to the east and join BRICS + and do the majority of their trade with other BRICS+ countries: energy from Russia, manufactured products from China. What NEED would they have for a ‘Eurodollar’? They could easily use the ‘EuroEuro’ and in fact it would be to the overall benefit of their countries, and the ‘EuroDollar’ would diminish in terms of deposits and thus power, rapidly.
The Atlantic Masonic-Zionist Hegemony are pwn’d and operated by their Hegemon-Plutarchy served by Vassal-Oligarchs.
Govts and National Currencies are pretty much pwn’d along with the Private Rentier-Banks.
I.E., They own most of the Western Civ. The Hegemon-Plutarchy will weather calamities -then recycle, reuse, and introduce successive Systems of Commerce+Trade.
The Hegemon-Plutarchy just had their influence-peddling Proxy-War Scenario against Russia to Control them – EpicFail; and their failing grip over China withering away as China develop their Technological+Industrial Bases, Military’s Range of Operations, and exercise their Authority and Economic Influence over Taiwan.
Through Russia, China, BRICS+, and SCO – Non-G7/NATO/€URoGarten Members don’t have to rely on the Hegemony’s Systems to eat, obtain fuel/fertilizer, conduct Trade, and economically thrive.
It’s no longer an Oligopolistic ClusterFrack for other Nations; but it won’t change much for Hegemony Members and Vassal-States who don’t trade much with BRICS+ and the SCO/SilkRoad.
The biggest challenge to US dollar dominance isn’t when for example BRICS members Russia, China or Brazil make an official joint announcement saying that from this moment they are going to abandon the US dollar for trades so that’s it the end of the US dollar.
The main challenge for the west is to prevent BRICS countries from building mutual economic corridors, investments, security etc. And this is exactly what NATO-Israeli genocidal regimes are doing right now waging wars around Eurasia’s doorsteps Ukraine and Palestine. In other words like the old days the west must divide these large regions in order to keep its petrodollar system functional. Well this won’t go according to western plans. It once did at end of the 19th early 20th centuries due numerous factors. Today it won’t happen again.
China will continue to expand the BRI network across Eurasia and Russia -Iran – India will do the same with the North-South corridor. It will take time to build all the necessary infrastructures and in the mean time they might continue to use the dollar but at some point they will simply no longer have any more needs for the US currency.
The other major problem for west is that they must try stop for instance mutual energy cooperation among say Russia-Iran and Qatar esp. natural gas. These three countries simply control most of the global natural gas reserves and soon they will establish their own OPEC-type organization. When that happens and when the rest of Eurasia and BRICS members i.e. countries with huge population India, China, Pakistan… join the network they’ll reap enormous economic benefits boosting their overall economic performance while on the other hand making manufacturing practice in the west totally irrelevant.
Berlin could try maintain an image of being the industrial hub of Europe but that would only be a symbolic move at best. Abscent any better or more profitable business outlooks, these once mighty industrial economies will have to invest in other types of businesses including especially the sex and entertainment sectors.
Naturally following this historic event the use of dollar among BRICS countries will nosedive which puts great pressures on western financial markets thus accelerating the de-dollarization process followed by the disintegration of the entire post ww2 western established order.
In one of the “recommended for you” boxes on YouTube was a Lena Petrova, who I do not know and have never heard of, with a following of over 300K muppets. She was interviewing a Marxian economist named Richard Wolff with who I am familiar, who in a two-part interview went on a rant against people “who blame immigrants for causing economic problems.”
Now having lived in California for 50 years and having seen what “immigrants” – who aren’t really immigrants, they’re barbarian invaders – do to an orderly and cohesive society and how quickly they wreck it, I recognized the agenda and turned the propaganda, off.
But the strange thing is, when I looked into the background of just who this “Lena Petrova” might be, there was nothing but the YouTube and a substack gate-keep. No bio, no C.V., no background detail, no relevent experience beyond “Ima SEE PEE AE!”
Where do these gatekeepers keep coming from, with their massive following of ass-lickers? What the hell is going on?
I will not say much, but I find it astonishing that the Jews are not mentioned, not once. The (financial) City of London is completely control by Jews. The Wall Street and its associates are controlled by Jews and the U.S. Federal Reserve is controlled by Jews. Thanks to Russia, Iran and China, the world is starting to free it finances from the clutches of the Jews.
This is common knowledge. Maybe it is shocking to people with no knowledge of economics at all, but anyone with basic education knows this.
This is not an indication that the US dollar is “more secure than ever.”
No, it hasn’t. China does not want its currency to become a global reserve currency, and actually takes efforts to prevent it being used as such. That is actually why the USA has accused them of “currency manipulation” by devaluing their currency.
Anyway, Woods is a moron, and this article will not age well.
If you only held dollar notes that’s true. They lost 96% of their purchasing power:
However ownership of assets between 1913 – 2024 is what really matters. The US asset base (corporate and real estate) is vastly greater than it was in 1913. Here’s a chart of the REAL (after taking out inflation) return on US real estate. It’s positive:
Same for gold. If dollars were converted into real assets from 1913 then the asset owner is ahead in purchasing power.
Problem that assets are increasingly held by fewer people. Corporate assets are concentrating in the hands of funds like Blackrock and Vanguard and the number of people with no assets keeps rising. All they can do is ask for wage rises – which they’re not going to get. Plenty of Mexicans and Colombians will work for less.
Excellent post – easily 100 times more accurate than the original essay which is, as you’ve already stated, full of holes.
I was about to post some of Dr. Roberts’ observations on this subject as rebuttal , but you beat me to it.
Cheers!
But what business?
The Eurodollar allows banks anywhere to create all the debt they want free of national central bank control ( that’s not to say that central banks like the FED and ECB don’t independently also create all the debt that they want).
What seems to be missing from the article is the question of how all this newly created debt is used.
For example, the Harvard Kennedy School puts the final cost of the Iraq War at $ 3 Trillion+
https://www.hks.harvard.edu/publications/true-cost-iraq-war-3-trillion-and-beyond
The US government didn’t introduce a supplementary “Iraq War Tax” (which out of interest would have totaled about $ 3 trillion / 132 million = $ 227.000 per US household.
Rather, they printed the money (issued debt) in the name of US citizens and will in due course remove that $ 3 Trillion in purchasing power from US citizens and all holders of assets denominated in US dollars.
This is a little different from the financing of the Union Pacific Railroad 1864+. These 19th century bond buyers got their capital back and an excellent return on their investment. The reason was that railways opened up West and a multitude of economic opportunities . IOW it was a good investment (unlike the Iraq War).
Thanks for this lucid and eye-opening article. It explains a lot. And how refreshing to scroll through 3500 words of competently crafted English prose.
Thank You, Mr. Woods for this fine article.
As your chart shows:
The worlds ” bankers ” are at the top of humanity’s smart chart. They always manage to avoid losing no matter what happens politically or otherwise.
The BRICS+ bloc is wise in not challenging what the bankers have created and maintained for many years. The bankers always win no matter what happens.
Their grip on humanity is satanic and permanent. There is no getting away from their control.
I fnd this article helpful.
Remember in 2004 Democrat Presidential Candidate Lyndon LaRouche who won primary delegates in a number of states, was prevented from seating those delegates at the convention by the DNC.
Why this historical tid bit is important is due to LaRouche’s leading role against cannibalistic economic looting to which the dope trade, Dope Inc., is an important specter of the financial oligarchy’s pirating.
The issue is that LaRouche provided the solution, adopted by Russia, in adopting a Physical Economic approach where the classical role of the nation state, to serve the general welfare, is understood to be accomplished through promotion of wealth production over money and finance, such that population expansion with a rise in intelligence of the population, anti dumbing down, is found to be the concern of a Physical Economic approach, to which the American System of Economics was the example.
Note who has influenced Russia’s economy, none other than Sergei Glazyev whom spoke at Schiller Institute Conferences, and also where the One-Belt One Road and New Silk Road projects came from!
As approaches utilizing a Physical Economic outlook for development rather than mere wealth extraction schemes based on fraud and military rage of psychotic narcissists that run the murderous “rules based order” of the west…
I been sayin’ long time,
“Never bet against the Fed.”
The Federal Reserve wishes it controlled the dollar.
That’s a nice hypothesis, but it’s wrong. The US didn’t start running trade deficits until the 1970s, and it’s been going downhill since then.
After WWII, the US was the largest developed economy in the world after all other economies destroyed each other in the war. The US had no wars on its territory for 80 years at that point. It was the manufacturing powerhouse of the world. The US would give dollars to other countries so that they could buy goods from the US with those dollars, helping the US economy by boosting demand for its goods.
Then, it all got outsourced to Asia. Today, the US is the e-thot, propaganda, financial swindles and gender reassignment surgery powerhouse of the world that nobody needs or cares about. Now it does import more than it exports. There’s only some much e-thottery a country can export, after all. Other countries send the US their goods, they get dollars in return and spend them on US treasuries and stocks. If you think consumer prices inflation is high, just look at stock prices inflation. It is off the charts. All those dollars get spent in the stock market casino, producing nothing of real value. Meanwhile, China today is what the US was after WWII.
Agree, but not enough. Hard money that is not transparently accounted for and out of the control of any insider group is not going to cut it. There are a dozen more requirements, …agreed not in the space of a comment.
For now, contrary to the article, yes there is central control of the global finance system. No, it is not the US government.
A very insightful and complicated article. But the dollar and methods of payments are just one piece of the puzzle. Lets take Politicians who are elected and we assume make policy and govern us. Where are they really on the pecking order? How powerful is the military industrial intelligence mafia? How powerful is AIPAC who donates so much money to politicians? Moreover…who are the top accounting firms and law firms and money people who have trillions of American dollars stashed away and floating through off shore money accounts and avoiding zillions in taxes and outsourcing manufacturing jobs….they are the real c …nts. The dollar and methods of payments is just a red herring.
Democrats cleaning the streets of zogbot scum.
Video Link
Video Link
At last, a good article in this site led by a sushi-eater Jew. Repetita juvant:
1940: “Anglo-saxon plutocracy is over,and Mitteleuropean aristocratic values of Nazi Germany will dominate the world”.
1960: “USSR is rising such as its rockets while America is falling due to its hedonistic values”.
1970: Sci-fi movies show Brazil, the country with the highest growing rates, leading the world… And outer space in a near future – Redfern’s books, “Brazil the movie”, etc.
1980: “America is dead and not more than a fat and lazy people. Only discipline can win. Learn Japanese because soon they will take over the world”. Sci-fi movies show America dominated by Japanese corporations, such as “Robocop”.
2010: “A multipolar world is coming! Soon dollar will fall and China will bypass USA”.
Poor people! They are so stupid that can not see as China, an animistic culture, depends from Western technologies to make miniaturised chips and other hi-tech facilities.
It is the Cousinhood. And the Cousinhood is ZOG. The author hints at this when he writes:
Where do these “international bankers” reside? The author provides another hint:
Vladimir Putin has let it be known he’ll incinerate the City of London if it comes to nuclear war, which these insane Golden Calf kikes are toying with.
The kikes are in the crosshairs.
If oil is no longer included in the formula that compounds the dollar, and the alternatives are half-way up, that is it. There are other scenarios, but energy transactions by 51% outside the dollar exchange would kill it.
Above half of transaction volume per day in dollars or other is outside any outsider observable dynamics. A very conservative guess. It takes bitcoin out of the picture for one. Other alternatives are not yet there. It could take an eternity in current measure(+ a generation) to see the clouds hovering to non insiders.
Gold – nearing 2500$ an ounce. Financial capital games seem endless. Zelensky is emasculating Ukraine … Just another techno neocon harrumphing about the dollar.
Nice article thank you.
How can the 1971 dollar not be backed?
We homeowners saw the mortgages go from 20 years to 30 years, basically making the property the permanent possession of the bank. Look up the facts. Homeownership is at an all time low. What is more valuable than land?
https://www.ers.usda.gov/webdocs/publications/41882/30067_landownership.pdf
https://www.axios.com/2023/12/12/mortgage-free-homes#
From the article: By the numbers: The share of mortgage-free U.S. homes has jumped from 34.3% to 39.3% in the past decade, per the census data.
How many people retire debt free?
Three in 10 devote more than 40% of their monthly income to debt and a quarter have a mortgage with more than 20 years remaining on it. More than half say they intend to enter retirement debt free, but only one-quarter of retired Boomers actually are debt free.
AND then there are monthly taxes, utilities, unexpected household and car repairs. In my case, elderly, my monthlies are as much as my mortgage. The rocks in my road led to a late mortgage which I may die while still owing, a problem for my son on social security as I am myself.
My view is from over the fence still……..and while the articles lead to a belief in paid off home ownership, I have my doubts. Homeownership for the Gov employed? What % of homeownership in your community is police, fire, education, local and federal gov employees?
The middle class mainstay retirees from factories no longer exist, being replaced by police and gov.
The paid off homes have a lot of explaining to do, who owns them?
“The idea of a “BRICS coin” has been floated a lot over the years, either backed by gold or fully digital.”
The day Tibet is free and independent, that’s the day when the “BRICS Coin” will come into being, so, the essential question for the foolish leadership of China is whether they want to keep oppressing the culture, the religion and the ethnic Tibetans or they are ready to become civilized. My guess is they won’t change until they have been soundly defeated.
Didn’t the big man Confu(sion)cious say something about the “Pride goeth before destruction, and an haughty spirit before a fall?”
This articles points out two things for me:
(1) it does a good job of explaining why sanctions or even the threat of economic sanctions is just bluster and bluff, and how Russia’s economy can be even stronger than before the war.
(2) this system is so entrenched, it would take not just the collapse of the US but also the West in general (ie several Euro countries nearly simultaneously) for this system you brr Ed broken – which surely means actual physical war, no amount of 5g hacking is going to bring so a large complex & autonomous system.
So, greatest fears might be realized – an actual ww3 which surely will impact most of the eurozone and the Middle East. I mean it had to now, doesn’t it?
At the level of everyday people, the US dollar is definitely going away.
FUS
We see the $US as king of international trading currencies. Its strength is in its present stability and manipulation backed by U.S. political and military influence.
The risks to it are two-fold. The dollar has no discipline being it is tied to no stable standard. Its liquidity is myopic. Without a discipline it is subject to printing corruption. The other is it represents the currency of America and its foreign policy, a growing pariah realized more beyond U.S. borders than within.
Over the lifespan of a mortgage, the dollars used to make mortgage payments are worth less and less.
Those of us who secured mortgages at around 2% have actually gotten a “good deal”.
AJP Taylor wrote about this. It was Germany’s need based avoidance of the London based financial web
Keith Woods doesn’t go as far as he should, but it is an interesting article, he makes valid points.
Missing much, but what he covers is of interest.
Also, one or two statements fit well with the doctrine of convergence being preached by the U.S.S.R.’s external journal of theory, Marxism Today, in the late 1980s.
Atypical article by him, take it for what it is, some isolated but valid points.
You’re correct that the US started running massive trade deficits starting in the 1970’s when the US dollar was taken off the gold standard and the petrodollar demand kicked in, and US treasury bonds became the new gold standard. However, the number one reason why Nixon took the US dollar off the gold standard was due to massive money printing to finance the Korean War and the Vietnam War in the 1950’s to 1970’s to defeat the spread of communism in Cold War version 1.0.
The US dollars being spent in Vietnam went directly to Vietnam’s central bank, and since Vietnam’s central bank was pretty much under the control of the French, all those US dollars made it’s way back to Paris. Charles de Gaulle didn’t appreciate that so he sent them to the US to exchange for US dollar at $35 dollars an ounce as promised in the 1944 Bretton Woods agreement.
Since the US didn’t want to lose all gold holdings at Fort Knox if other countries started doing the same thing (it’s like a run on banks like what happened to Silicon Valley Bank), this is the reason why Nixon took the US dollar off gold. All of this enabled the US to run a huge trade deficit, move manufacturing overseas, and let the world make all the low end and mid tier goods and simply pay with money printing which cost pretty much nothing to print.
Re: De-Dollarization
The primary tell of De-Dollarization is how much the Federal Gov’t needs to pay its creditors. Right now Treasuries pay the highest rate versus all other developed countries ( including China )
The primary effect of the Feds being forced to pay higher interest rates is….a financial death spiral. In 2025, Around 35% of Federal Income will be devoted to paying interest on the Federal Debt. What interest rate would you require from such a debtor ?
But manufacturing/industrial leadership does produce Empires.
1760 – 1914: Great Britain. Automated spinning and weaving. Coal/iron/steam/factories/railways/shipbuilding. Dominant world navy. World reserve currency Pound Sterling. The British Empire.
1870 – 1945: Germany. Steel /chemicals/ engineering/electricity. Dominant European industry and European army (until defeat). The German thrust for a land Empire to equal the British Empire. A projected German Empire from the Atlantic to the Urals.
1868 – 1945: Japan. Steel /chemicals/ engineering/electricity. Dominant Asian army and navy (until defeat). The Japanese thrust for an Asian Empire covering all of N.E. and S.E. Asia inc. China, Korea, Indonesia, Burma, Singapore. Imperial Japan.
1945 – ? United States. Mass production/electricity/automobiles/aircraft/radio/broadcasting/electronics/internet. Dominant world military. World reserve currency US Dollar. An American Empire covering Western Europe, Canada, S. Korea, Japan, Australasia and the Middle East. Imperial USA.
2001 – ? China. Low cost mass production. Most leading technologies and industries. Manufacturing and trade world leader. Actively looking for a replacement to the US Dollar through the non-US BRICS organization. Rapidly developing military capability. So far only commercial rather than colonial relations. So far not using the term Empire/Imperial.
The trajectory of the USA vs. China is an open question.
Try owning a condo. Reading our monthly bank statements and the amount of money it takes to keep a seven story concrete and steel building up to par in simply enormous. It boggles my mind actually.
A technique of inflation, some interesting words and history:
Robert Anderson, Secretary of the Treasury spelled out the technique:
“Suppose tomorrow morning I want to write a check for $100 million, and the treasury does not have the money. i call the Federal Reserve Bank and ask,”Will you loan us$100 million at 3.5% for six months if I send you over our note to that effect.?” The officer of the Federal Reserve would naturally say, I will.” He would merely create that much money subject to reserve requirements by crediting our account in the sum and accepting the government notes an asset. When I finished writing checks for 100 million, we would have added 100 million to the nations money supply. This, he added, is one of the principles by which the 1940 dollar has shrunken to .41 with a quadrupling of the money supply.”
and imagine how close to worthless the American dollar was in 1971:
“Within a few days after I read the statements of Horace Snifkin, I picked up a copy of the provincial newspaper , The Auburn, and read the headline:
Dollar Crisis in Eurpoe.
In three frantic hours, the West German Central Bank was forced to buy more than $1billion in US Currency. The next day, May 6, 1971, the same paper carried an Associated Press release which read,
Several European banks have stopped buying American currency in the face of the massive dollar selling rush.
In August, 1971, all of Europe and the world was startled over the announcements that Europeans had closed their windows to Americans desiring to sell or exchange their US dollars for European currencies. the crisis continued 1q2, 13, 14, 15, 16, 17, 18. for seven long days, anger and frustration was rampant among the Americans tourists on the continent.
Again in March, 1973, European banks refused to accept American dollars, this time for an even longer period -seventeen days.
and then comes this juicy morsel:
Often abroad I thought with sadness of the many American friends at home who felt their castle could never crumble and their securities could never be swept aside. During the summer of 1971, Eusrpoeans who had been the recipients of Americans generosity after the war seemed to take increasing delight in depicting her economic problems. the artists of Europe seemed to vie one with another in creating colorful covers for their magazines. Pourquoi Pas showed the dollar like a sinking ship into a sea of oblivion. Americas economic problems were not discussed merely by sharp witted journalists, not by the words of prejudiced orators. Men as famous as Dr. Klaus Noe, German economist in the Cabinet at Bonn, referred to American dollars as “Printing Press” money and predicted their future would be the same as that of cancelled currency of Germany in 1923.
I could not lightly brush aside the comments of Dr. Noe. for several days i had been speaking in Beethoven hall in the capital of West Germany. The city of Bonn received us warmly, and the press covered our appearance in the city with the finest publicity we had received on the continent. Dr. Noe’s words were not too different from those i had heard in Washington, DC. My son , Robert Lee, attending his class in economics, heard the teacher say on the opening session,
You men have come to the money in America’s history when a man might light his fire with a $10 dollar bill as readily as with a match.
For five hours, I sat alone with a speical advisor to the U. S. President. i had been his guest in the International Board of Trade in New Yor, and he in turn graciously attended the meeting in which i spoke on the subject “The Death of the Dollar.” Following my address, we sat together in a New York restaurant from 10:00 P.M. to 3:00 AM. At the conclusion of our conversaion, he left me with the statement,
Your presentation, in my judgment, is flawless. the only additional comment i would add is that the situation is graver than you have depicted it.
Words seemed weak and futile to describe the emotions of ones heart when he sees his beloved America lose not only her money, but her prestige and integrity abroad. In August 1971, there was a sight that saddened the hearts of Americans in Paris. On the steps of the Sacred Heart Church, a poor beggar sat with hat in hand, asking for chairty. Attached to the hat was a card which the beggar had crudely scribbled four words: American Dollars Not Wanted.
If these words merely reflected an intended insult froma lone beggar, few would have cared, but the sad truth was they they all too condidly depicted the attitude of much of Eurpoe.
All above quotes taken from a book by Dr. Willard Cantelon The Day the Dollar Dies, logos International 1973 pgs 36-29
and so here we are on the cusp of 2025 with the QR Code and a number assigned to us all whereby a new ration system will be rolled out. Way back in the 1970’s Dr. Cantelon foresaw this system and warned one and all of what is coming and how could a man do this foresee it all? Well, because it was written as a warning to us 2000 years ago. We are watching it unfold as we speak…
https://www.armstrongeconomics.com/international-news/great-reset/digital-ids-in-china-the-great-reset-is-happening-now/
A wise word to think about now I dare say:
“The master commended the dishonest manager because he had acted shrewdly. For the people of this world are more shrewd in dealing with their own kind than are the people of the light. 9 I tell you, use worldly wealth to gain friends for yourselves, so that when it is gone, you will be welcomed into eternal dwellings.
10 “Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much.
Get it? SO THAT WHEN IT IS GONE, YOU WILL BE WELCOMED INTO ETERNAL DWELLINGS!
one will want to escape the horrors that are arriving yes? That is the message of the Gospel of Yahweh!!!!!!!!!
“The Eurodollar is firmly backed by the US military/industrial/congressional complex and its North Atlantic Terrorist Organization subsidiary.” – I think you nailed it. As long as MIC/Inc was superior to tiny tinpot dictators easily removed by coups and color revolutions, DaEuroDollar was king.
Yes, efficiency in financial affairs are important – but only under relatively stable socio-economic conditions – that era, even if not immediately obvious to most folks, is rapidly collapsing NOW!
I found this link tucked away in the footnotes of a paper to be presented at the American Econometrics Association confab in San Francisco this coming January:
https://drive.google.com/file/d/1-O8A7aY7SIOUguLzmt7dxXpHK3YrhRt9/view
It would seem that the BRICS+ people are already envisioning your ‘international currency for export/import’ that is based on an abstract, unfalsifiable global reference commodity.
The dollar is based on the corruption of vassal states’ elites and on the fear the US military inspires. No fear, no dollar.
German manufacturers are closing up shop and heading for China. Why? The supply chain is being dismantled in Germany, and they are no longer competitive. Since Nordstream was blown up by the U.S., cheap energy prices are no longer possible. Energy is a dominant input variable in the production and supply chain.
China does not permit its Yuan to be used as a third party medium of exchange. They rely on bilateral swap lines of credit. Their sovereign debts are not allowed to be on-sold into foreign markets. They have no desire to use their state credit to support “international privateers.”
China is focused on three work arounds: Trading Banks, Swap Lines, and in future possibly the UAE. Once UAE joins the Brics, they can use their pools of dollars to cover overnight loans of third parties. UAE and Dubai especially have the financial wizards and know how to consummate third party deals.. They are also part of the SWIFT system. U.S Federal Reserve Note, and EuroDollars will continue, as U.S. citizen are made into tax donkeys and guarantors, to back up the international creditor class maneuvers. China is not going to burden and screw its citizens by making Yuans a reserve currency.
China has also created an analog to Hjalmar Schacht’s trading banks. I keep maintaining that China is effectively national socialist, like Nazi Germany (a good thing). I think they probably are superior to NSDAP on economic theory, as China is uber focused on vertically integrating the supply lines, not the the money. The money is only secondary, a tool.
Focusing on and controlling credit via private banks is very Jewish, especially since Jews invented finance capitalism, and they then infected London in 1694. Money magick fuck#ery by creating new debts or schemes like EuroDollars make Muricans (I’m one) into tax donkey and ultimate guarantors for their usury bets.
Schacht’s trading banks would isolate national moneys to the banks, and then goods would transfer. Upon goods transfer, the debt and credit relation would cancel. This mechanism was the primary way that NSDAP got around the jewish finance capitalist world’s trade barriers, and hence avoiding exposure to dollars and British sterling. The FC world was also trying to starve the Germans out via blockades, and today’s China today is also food dependent.
If Germany needed Tin from Burma, they would make a request of Burmese. The trading bank in Burma would issue new Kyats, and then Burmese labor would get busy mining new Tin. In the meantime, Burma would want German sewing machines or other industrial goods. The trading bank in Germany would then issue new Reichsmarks to front load production. Once the goods cleared, the ledgers at each bank also cleared. There was no need for a reserve currency.
In the Nuremberg show trials, the Jews kvetched about how this scheme benefited Germans as Burmese people were supposedly screwed over by not getting fair trade with equivalent sewing machines, etc.
Never mind that Jews have alway inserted themselves as a creditor, or they get between new credit and debt to slice off a piece of the pie for themselves and their tribe. For example, a ships bill of lading can be hypothecated into new dollars or sterling, and then there is a fee assessed. Why it is just the price of business goy, if you want to travel on the reserve highway, pay the toll.
Go to about 16 minutes in of the video to get a sense of China’s swap lines, and trading bank scheme.
Argentina is trading with China but it is invisible to the Western Globalist Finance Capitalists (about 17 minutes in). In my estimation, it is a trading bank scheme.
China shadow money system is with swap lines and trading banks. The third party trades will likely be done in Dubai once the UAE joins the Brics, and this will involve an overnight escape to the dollar, to settle imbalances. I would suggest that since China is monetarily astute, they will never fall into the trap of allowing their money to be privatized and used as a reserve currency. They will not screw over their own population for the wants and scheming of a tiny financial (jewish) elite. They are focused on supply lines, and owning the entire production chain from material inputs to finished goods. When China gives loans to Africans or Latin Americans, they use dollars, not Yuans. They have excess dollars gained in imbalanced trade. When the loans cannot be paid back (if dollars become scarce), then goods instead transfer.
China does not use the debt mechanism as a usury scheme like the Jew (or the deformed creatures in London and Wall Street). They often forgive debts, or they find some sort of deal that is win-win to keep the supply chain intact. Also, their yuan debts tend to have productive equity on the other side. In other words, the debts can be paid with production.
Video Link
“It is easier to rob by setting up a bank than by holding up a bank clerk.” Bertolt Brecht
December 5, 2023 Visualizing $97 Trillion of Global Debt in 2023
Global government debt is projected to hit $97.1 trillion this year, a 40% increase since 2019.
https://www.visualcapitalist.com/97-trillion-of-global-debt-in-2023/
Read The Lost Science of Money: The Mythology of Money, the Story of Power
Book by Stephen Zarlenga
If you look for pdf avl on Google
The Real Reason Why Trump Wants To End The War in Ukraine
Video Link
You are asking fundamental questions.
My take: on the top, really, are the people who manage the world fiancial system. But, one could say that they, themselves, are constrained by the system itself. The (visible) moves we’ve seen from Summer 2019 to March 2020 point into that direction.
The System, itself, got into problem–>the managers…ahm…”suggested”….solution(s). Blackrock “going direct”. Allmost all the world politicians, militaries, security apparatuses etc…lined up and executed. The System got stabilized and is slowly going along certain path.
Now, it could be argued that all that, actually, serves another, really sinister (for most people…) agenda(s). Depopulation etc. I don’t buy it.
The fundametal question remains: is the System run by the (certain) people…or…the System, itself, runs those people. My take is the later. Could be wrong, of course.
What’s the point?
Heads we win, tails you lose. The way of Jewish Power.
Interesting piece, but would like to see more support for its thesis from other voices.
A shorter version goes like this:
The U.S. dollar has resiliency because every other currency is a shit fiat currency that is far shittier than the dollar. Add on top of that no one including China can recreate our bond or stock markets. Chinese ADRs want to be traded on our exchanges despite the wealth in China. Everyone wants access to U.S. exchanges, including Europeans because we have volume, liquidity and the tech to support an insane number of transactions per day.
The dollar is really good when compared to *any* currency in existence.
Poo-poo the stocks and bonds all you want, but your forefathers built something that cannot be easily replicated by any other nation state. It’s a testament to Anglo-Saxon prowess and sensibilities about economics that we have the lifestyles in America that we do.
And it gets chipped down whenever Jews are allowed to seize sovereign assets as they did to Russia or start more wars. It weakens every time we import another brown immigrant who comes from a backward society where bribery and corruption are just out in the open and considered “part of doing business.” The stories I could tell people about what Indians do in their home country to each other…
Ditto for Russians and Ukrainians I’ve known.
The dollar will remain the default reserve currency and the process of disentangling from it has already started, but will take decades to complete and is not certain to succeed. The game is really America’s to lose at this point and it probably will because of its fascination with low IQ brown people from shitholes. Anglo-Saxons have flaws but they were unsurpassed in creating high trust societies founded on law and respect for property.
There are no countries currently that can do what America did with her markets. It’s one of the drivers for the dollar’s strength.
I know this is the common wisdom among many western economists, but it is not the full story. To export RMB, China could for examples, try to run a massive service deficits (half a billion Chinese tourists, anyone? or 10 millions Chinese students, or…). China could also export its currency by investments, or loans, etc.
Of course, each of the (currency export) options come with its cons, e.g. trade (manufacturing outsourcing), tourists&students (social costs), investment (political risks: should use military to protect Chinese investments?), etc. Being a reserve currency also entails *responsibility* (a factor people always forget), e.g. maintaining stability of the trade-balance purchase power of the currency, convertibility, liquidity, etc. That is why China has no urgent desire to, rather than cannot, let its currency become the global reserve.
But you are right. The dollar would likely continue to be held by most countries, and the main reason is because the world hasn’t agreed on what should be the post-dollar order be. China actually didn’t mind to let dollar dominate, but US behaviors of bullying and irresponsibility are forcing the world to work hard for alternatives.
Jews.
Priss Factor gets it.
Gday all,
Reference 4, Stephen A Fowlers’s The monetary fifth column – the Eurodollar threat to financial stability and economic sovereignty can be read here :
https://www.thefreelibrary.com/The+monetary+fifth+column%3a+the+Eurodollar+threat+to+financial…-a0374922136
BTW –
Do some posters confuse printing dollars with creating money ?
Not the same thing – banks create money as numbers in a computer, they don’t physically print dollar bills. The amount of physical $ bills is a tiny fraction of the total $ in bank computers.
No mention of the cryptos?? I think they are more junky fiat but many consider them the future.
Academic tomes are so boring. The same information that provides fascination can be apprehended by experience, hybrid construction for multiple sources, life (analogy, parallels, deductive truths from inductive data, evidence, observation, etc.
Many errors can be avoided, including misjudgments, by starting with induction and processing to deduction.
What is inductive reasoning? Inductive reasoning is a method of drawing conclusions by going from the specific to the general. It’s usually contrasted with deductive reasoning, where you proceed from general information to specific conclusions. Inductive reasoning is also called inductive logic or bottom-up reasoning.
Inductive reasoning relies on evidence and observation to reach a possible truth of the conclusion. We say possible truth because inductive conclusions are not certain, only probable. Deductive reasoning, on the other hand, uses statements, or premises, that are certain by definition.
Field research in a discipline requires a majority of induction. Deduction can set the parameters, limits, and ranges.
In fact, our government has already loosened some financial regulations. Given the Fed’s interest rate hike and so on, money will not be willing to come in.
One of the core problems is that we have primary and secondary financial markets here that make it very difficult for non-bookmakers to make money.
Even BlackRock China will lose a lot of money.
Our government just doesn’t like bubbles to get too big.
And we actually hate some quant funds because they look very high-tech, but they can easily be dressed up as insider trading. This is a precedent for the United States, and we don’t want finance to destroy the real economy.
You are right. The US Dollar hegemony is where the USSR’s military might was in 1987. The masses cannot grasp the situation, a few short years from its end.
Unless you are a Jew, your forefathers didn’t build any of it.
LOL. Like you give a d**** about the Tibetans, or any other CIA-sponsored “oppressed people”. Why don’t you give up your virtue signaling? Or better yet, see a psychiatrist for your paranoia / delusions.
The foremost monetary economist Jeffrey Sachs believes the end of the dollar as the global reserve currency is coming, but maybe not as fast as some people are saying. Sachs has said it’s the general consensus among monetary economists that the dollar will end as the global reserve currency within the next decade.
Shame the flow chart is so low-res
The difference between the Jews behind Biden and the Jews behind Trump is that the former are evil while the latter are… Well, there’s no difference actually.
Yes, the Russian Academy of Sciences has already been running the models for years now.
From your link (below), a truism that the “commodity bugs” don’t seem to comprehend:
https://drive.google.com/file/d/1-O8A7aY7SIOUguLzmt7dxXpHK3YrhRt9/view
(The new international currency, or rather the future international currency being devised, will also include a basket of national moneys, and commodities derived by the models. Keynes Bancor is basically an accounting mechanism for marking international trade.)
Yes, I get it [= the zusa Fed-$ ‘free lunch’], but in 99.99% of cases, it’s not ‘paper’ but electronic fiat [= no ‘intrinsic’ value]. I agree that zusa abuses its ‘massive & grossly growing deficit’ scam, but if I understand the headline article, the zusa deficit [Fed printed via a keyboard] is still ‘very small beer’ compared to the Eurodollar ‘pool’ which is also ‘printed’ via keyboards, but as part of the world banking/exchange processes. I see a slight possible problem in that currency is ‘fungible’ [=replaceable by another identical item; mutually interchangeable] so Fed-$s are indistinguishable from Euro-$s [both being fundamentally worthless] – except by those who [in their minds] accept ‘foul-fiat’ as having some ‘real world/transaction’ value. Perhaps they [= ‘market-makers?’] all meet Friday-evenings down at the pub and agree to what’s worth what, where and when?
PS The ‘not 99.99%’ occurred at least once in post-2003 Iraq, so we hear, when zusa was shipping in pallets of $100 bills by the cubic-meter and distributing it as bribes; since nobody had change, that set the price of a cup of coffee out in the boonies to – ta ra! $100. haw + rgds
“Or better yet, see a psychiatrist for your paranoia / delusions.”
On my way to see Dr. Fu Manchu…
That was i was referring at. Thanks.
This comment of yours is an overwhelming treasure trove of insights into the dynamics of Jew U$ury and China’s successful methods for avoiding being victimized by it.
These are all key realities the knowledge of which gets suppressed by ‘political correctness’.
Indeed there is a lot of brute forcing, alas improvisation going on. Finance is as AI, too many variables cannot be easily controlled. Garbage seeps in, more so by adding cycles.
The human brain does not scale but primitively.
Complexity must turn into chaos at any point, and another cycle then starts up. The system, has a life of it’s own. Cycling is one phenomenon that one can observe from the outside. Try, rewrite, try again. There are no clear theoretical concepts to the patched up neural path-ways of trade and commodities.
It all ends up to this, one way to put it: “quality of desire”, the goal sets of human individuals, any individuals is restricted to the short term. We cannot conceive ten thousand years, nor in breeding, not in organizing, not in building an eco-system. …And that is what it takes.
That “another cycle” is what “digitalization” of everything on the planet is all about.
Universal Digital ID, CBDC, quantum computing etc…etc…Social Credit too and the similar, of course, for the plebs.
TPTBs are, as we speak, ironing out some glitches (this Crowdstrike thing as an example of some related problems), but we are getting there.
Technocratic dystopia (or utopia, depending on the position on the social ladder).
Not that most people are paying any attention to all that, crowd on the “alternative” included.
Who cares about derivatives when Trump’s ear is much more interesting.
Makes sense.
The second copy leads to hi res version :
Thanks Kapyong
The Chinese see others as fellow human beings, so have NO intention of ripping them off. The West, in contrast, deriving from Judaism and the expression of their cupidity that is capitalism, see others, including the ‘useless eaters’ in their own societies, as cattle, unpersons, marks and rubes etc, fit only to be exsanguinated. The Chinese want markets-the West wants blood.
The US dollar is good for blood-sucking, and as a means of exchange in countries wrecked by US malevolence. The Chinese have NO interest in either.
Whoever it is, a Jew would be best. How’s life down on the plantation, these days?
I love how libertards refuse to acknowledge the concomitant liability side of this money creation bogeyman they’re always hyperventilating about. The bank makes a loan for one dollar, that dollar enters money supply. Later the dollar is paid back, dollar exits money supply. The net impact is zero.
You start off name calling which adds nothing to your observation but labels you as someone that can’t make a substantial point. The simplistic rest of your comment is proof you can’t make a substantial point, so no surprise.
Inflation is always and everywhere a monetary phenomenon.
Milton Friedman
Inflation is the one form of taxation that can be imposed without legislation.
Milton Friedman
Please explain how price inflation comes about under your monetary inflation net impact is zero fallacy. Milton Friedman was a high priest of the economics religion and understood that something from nothing has a lingering effect.
The important point you so obviously missed is where did that dollar come from that the bank is loaning out???
“Someone deposited it” you say, and the bank simply loans it out. Wish that that was the case.
Fact is the bank created that dollar out of thin air and collects interest on this!
Here is how this happens.
A worker deposits his pay cheque of say $1000.00. Conventional wisdom would have you believe that the bank may retain, say $100.00 and loan out the rest at a slightly higher interest rate than it pays to the depositor of that $1000.00. Not so!!!
What in fact happens is that the bank goes Hmmm, we have this nice $1000.00 on deposit. We’ll keep it all as the fractional reserve and loan out $10,000.00!
So, where did that $9000.00 come from? From thin air! To add insult to injury the bank gets real money in interest for the “thin air” money it created at no cost to itself whereas the interest the bank collects someone had to work for.
The numbers I used are strictly for illustrative purposes. In actual fact the money created out of thin air is a much larger ratio to the deposited money.
BTW the “thin air” quote is from a US Federal Reserve individual who was questioned by a Representative committee member as to where the money from the Federal reserve came from.
Yep – backwards to how it is commonly understood (assuming a 10% Required Reserve Ratio.)
Meanwhile the actual RRR for Canada, the UK, New Zealand, Australia, Sweden and Hong Kong, and is apparently ZERO (but their money creation is supposedly limited by capital requirements – the capital adequacy ratio.)
USA is supposedly limited by interest rate, not RRR.
Turtles all the way down …
Woods, you’re a Peter Pan type who has no qualifications to write about this stuff. You’re not 30 years old, have never had a job, and yet you’re writing word salad articles about global finance and neoliberalism.
Also, I used to enjoy drifting around a big university library, many of the tomes I was finding were far from boring.
There is much lack of clarity about this issue of money, in particular in the case the OffShore- or Euro-dollar, in my opinion.
We now have electronic money, just an electronic ledger system, replacing macaw feathers, abalone shells, gold, …
Money (split-barter) avoids direct barter (chickens for shoes…) and is essential in human economic activity.
The important, largely avoided (3rd rail because of the enormous power and wealth of bankers?), aspect is the banks creating money, which is a needed function if the money is to be used for the benefit of society, but charging interest, which causes an exponential (because of compound interest) transfer of wealth to the finance capitalists.
Creation of legal tender is a proper function of government (Adam Smith). Now, legal tender is an electronic balance created by a bank loan.
Loans for socially beneficial purposes (business, home loans, …) should be available without interest as a proper function of government (private parties can of course negotiate loans with interest if they choose to).
The current Offshore Eurodollar system is a late-stage capitalism racket with no logic, except that it enriches those powerful enough to control the territory.
Eurodollars will continue to work, until they don’t, when the crash of confidence comes, perhaps because of emergence of BRICs.
There is no social contract in late stage capitalism. Ordinary people of the world unite! https://acp.us/intro https://vashiva.com/the-swarm-how-the-few-control-the-many-what-we-do-to-break-free/
Looks as an iron logic for those powerful enough.
Funny. Feels good, though.
I’d say their Nation’s credit. The State is at best a facilitator. Otherwise good point.
This is barter, at the level of the interaction between traders. Germans don’t see Kyats, Burmese don’t see Marks, there is no exchange of currencies between traders. That seems very limited, as only traders that match in their reciprocal needs would trade. If Germany doesn’t need Tin, it cannot sell sewing machines to Burmese. I guess German makers of sewing machines want to sell to anyone that has Marks to pay.
Table 1 in Bank of International Settlements Papers No 65 “US dollar funding: an international perspective” by the BIS Working Group chaired by Sally Davies (Board of Governors of the Federal Reserve System) and Christopher Kent (Reserve Bank of Australia), dated June 2020, has a figure for the size of the eurodollar market in Table 1. That figure is USD110 billion.
I asked my AI assisstant about the size of the eurodollar market, so it did a search and returned values between USD1.7 and 57 trillion (it seems my AI assisstant did not find your higher values above or deemed them not sufficiently trustworthy). But I don’t trust my AI assisstant 100% either so I will go with the BIS Working Group value.
Looking at the same Table 1 in the BIS Working Group report, the eurodollar market is one of the smallest of 14 components of global USD funding markets.
85% of what Germany exports is also imported. Germany lives on its value added to its imports.
Sewing machines, bicycles or mopeds, small cars and trucks, all types of small tooling and machinery, is saleable in second and third world countries. As pointed out above these countries would sell raw material to Germany.
This was, in fact, done with Argentina I believe. Germany shipped machinery and chemicals to A, and Germany received grain and meat from A in return.
According to Churchill this was unacceptable to his friends in London and WWII was necessary to stop this. Bankers must skim off the cream don’t you know.
You only think that he, she, it, they are your ‘assistant’, Forbin.
Sure there are inefficiencies in bank intermediation in trading (which are not inefficiencies for the bankers) but barter will never be the norm in current international trading. Current international trading is too complex for barter. A standard measure of value for settlements is necessary. It can be such that bank intermediation is minimized.
The real threat to the Dollar’s supremacy is the American ruling class itself (namely, the part that’s essentially serving Europe from D.C.)
You heard about the chicken and the egg?
Which came first? The corrupt politicians who let in the immigrants? Or the immigrants who elected the corrupt politicians?
The powerful Eurodollar? … and why it won’t crash?
That is like talking about the powerful stockmarket before 1929.
I will keep this article for 10 years, then review it again.
As I become older, the more I see the stupidity of new authors and new commenters.
“…It can be such that bank intermediation is minimized…”
I certainly agree with this statement.
By arranging for large volume barter such as meat and grain from Argentina for German machinery and chemicals, this serious competition for international bankers would keep these rapacious operators in check.
In time even smaller international trade could be set-up utilizing modern computerized data bases. Methinks that this would also facilitate 3 way trade.
The point being that serious competition is required to keep bankers in check.
In your description of how international banks create money, you state they loan much more than they have on deposit. You write that they create those dollars. They give actual dollars to the borrower. So my question: where do those dollars come from? They don’t have power to create out of nothing like the Fed, do they?
When a bank makes a loan, they give dollars to the borrower. Where do those dollars come from? Banks can’t just create them, can they? I understand the Fed can, but not banks. Or am i missing something important.
Tangentially: Once upon a time I managed personal money for a director of one of America’s biggest banks. He took me to their executive HQ and showed me the govt auditors with permanent desks in the building, and explained how the loan to reserves ratio was carefully regulated.
Source: https://singjupost.com/full-transcript-money-as-debt-full-length-documentary/?singlepage=1
I read this a long time ago, so it may be outdated. But it’s probably helpful if you’re unaware that private banks create money.
Every time a bank makes a loan to someone, over 90% of that loan amount is conjured up out of this air, ie at no cost to that bank.
The borrower, however, must pay back that fee money with money he had to work for.
Quite the racket!
Any talk of money that doesn’t differentiate between M0, M1, M2 and such, and just calls all of these animals as “money” like they are the same thing, is just disinformation. This isn’t an irrelevant technicality, you people are calling completely different things by the same word
Not a single percentage of the populus, A-N-D the senate alike is capable of grasping enough of the variables. We live a role-play, we are entertained by more role-play. Kabuki theatre, as spectators, and as actors alike.
For ideas and concepts to come to the fore, they must be foremost static and dumb.
Instead of criticizing, why not educate us on your topic. Further, how does that affect the argument of money “out of thin air”?
There are a couple of well known articles by Richard A. Werner, from the Centre for Banking, Finance and Sustainable Development, University of Southampton, United Kingdom, that support the hypothesis that banks do create money out of thin air when they make a loan.
The most important of these articles actually proved empirically, from a bank’s record while making a loan, that the money is created anew by the bank; it can be found here:
http://dx.doi.org/10.1016/j.irfa.2014.07.015
“Can banks individually create money out of nothing? — The theories and the empirical evidence”. International Review of Financial Analysis 36:1-19, 2014.
Just read the Abstract if you don’t have access to Elsevier’s library. It’s enough.
In spite of this fact, that private banks do create money when then decide to make loans, they are at the same time highly regulated and delimited, and have to report regularly to monetary authorities for all the money they create, not only to keep track, but also to enforce the limits imposed by authorities.
The part in this article by Mr. Woods about private banks creating money is correct, but the main topic about the significance of eurodollars is BS, see my comment #106.
Because theres not such thing as “money”. Theres different financial “animals”, to give them a name, that are collectively called money due to the inability of the masses to grasp nuanced concepts. Its like calling a cow and a dog “animals” because they are animals but then you start to believe that a cow is a dog and viceversa just because both are animals.
This confusion is caused entirely by the semantics of calling different things by the same name.
I will now explain briefly how different kinds of “money” are created out of thin air, and how they are different.
Central Banks create legal tender out of thin air. This is a combination of paper notes and accounts at the central bank. This money has basically legality in all the jurisdiction of the central bank. This is M0 and its what the plebs think about when they think about money.
It cannot be created by some commercial bank like Wells Fargo or whatever.
What these non-central banks can create is their own accounts in their own internal records, and they can create numeric registers in these internal accounts at their own computer and they can make contracts. But none of that has any value outside of these banks.
So when Wells Fargo gives you a loan and now your bank account at Wells Fargo says “X dollars” that isnt M0 money. You cannot take out that money out of the account. Its just a contract and a number registry in a bank computer. It is not legal tender. You also cant do a bank transfer of that record to another bank, or turn it into cash. Its a completely different thing that has nothing to do with what the central bank creates.
You just call it money because of laziness.
What you can do with that “internal bank record” is to trade it. To sell it for M0 money if you want, and thats something that the commercial bank will do for you “under the hood”. A commercial bank has a contract with you forcing it to trade its “commercial bank account money” for “central bank money” and this is done with no problems 99.99% of the time, so in your brain now you think its just the same thing.
Other non-banks institutions like Paypal and Venmo do the same, they will give you an electronic account where you see “X dollars” in a screen and think its money. But of course Paypal cannot create legal tender, its just creating a number in a private website. It just promises you legal tender, tells you how much you can get and almost always delivers it. A gift card company does the same.
It is legal to trade promises. To create a contract with a promise and to try to barter with it. But ultimately what us being promised in these contracts is the M0 created by the central bank
Bank money cannot be taken out of a bank. It cannot be transferred to another bank and has no legal value, except as a contract. Bank A doesnt give a shit what Bank B writes in its own internal accounts. Thats the kind of “money” created by commercial banks.
It is impossible to explain money creation without explaining how all the different kinds of money get created. There isnt just one single story.
A very interesting article, demonstrating once again that the world is even more complicated than I imagined.
But what does it mean to me? I’ve got a bit of cash to invest and was thinking of putting a little in bitcoin. With so many hundreds of trillions floating around in Eurodollars it strikes me that bitcoin is just a drop on the ocean, making it perhaps a great investment. Why shouldn’t it rise to 10 million dollars a coin? The world financial system would hardly notice it
I hope cryptocurrency really takes off. Although the current financial system ruled by Eurodollars and the US are probably going to do everything they can to shut down bitcoin and ethereum if it gains too much traction. Right now, crypto is nothing burger, tiny in the scheme of things and not a threat. Once it becomes a threat, watch up for it’s impending destruction.
If they were not shitless scared to lose this hegemony and end the dollar status, they wouldn’t have had Ghadaffi assassinated or Saddam or any other leader who challenged this status by planning to have their own mean of exchange.
This is what’s happening now with China, Russia and the BRICS.
Gold is also at an all time high, not by coincidence.
China has just to drop its dollar reserves or call its debt on the US and it’s game over.
And honestly, it’s time for game over for the evilest empire that ever existed in this world.
Ps: Euro = Monopoly money (the game of Monopoly), it has less value than horseshit and is set to fail.
I regard this article as one of the most important of this last year. He explains:
1) How commercial banks create 97% of the ‘broad’ money. He also provides a link to the Bank of England’s bulletin which explains money creation.
2) How foreign banks started creating debt in dollars. And how this bypasses US controls on dollar creation.
3) How the need for a convenient foreign exchange medium drove the foreign banks to grow dollar debt creation.
4) How the present value of Eurodollars is so huge that it is entirely out of the control of the FED, US treasury, and other institutions that normally would regulate it.
5) Why the Triffin dilemma turned out to be not relevant.
What I don’t understand is why there is so much resistance to this concept. Many of the comments are meaningless.
Crypto is going to takeover the monetary system by creating a universal CBDC system. The Euros and USD will remain, but they will be the stablecoins.
Hijacking Bitcoin https://odysee.com/@RogerKVer:9/btc-has-fallen-behind-cbdc’s:0
Bitcoin was hijacked and Trump will be the father of creating the global mass surveillance system. Step one was vax, step two everyone on the blockchain. https://rumble.com/v58z3wl-btc-is-cbdc-and-your-future-enslavement.html
In a recent documentary/sales-pitch, Bitcoin promoters are even saying Bitcoin is God’s Currency for the Abrahamic Faiths. https://odysee.com/@BITCOIN:98c/god-bless-bitcoin-trailer:b
Crypto was created in the 1990s by the NSA to become a surveillance system
https://www.armstrongeconomics.com/world-news/cryptocurrency/how-to-make-a-mint-the-cryptography-of-anonymous-electronic-cash/
Bitcoin was hijacked and Roger Ver was arrested recently for exposing the truth
https://odysee.com/@RogerKVer:9/btc-has-fallen-behind-cbdc’s:0
https://unlimitedhangout.com/2024/07/investigative-reports/trump-embraces-the-bitcoin-dollar-stablecoins-to-entrench-us-financial-hegemony/
https://unlimitedhangout.com/2024/07/investigative-reports/the-chain-of-custody-the-mafia-holding-the-elites-bitcoin/
Well many people want to believe that the FED and central banks have direct control over all the world’s money supply, or something to that effect. Many older people especially never abandoned Cold War-era conspiracy theories where a cabal known as the New World Order controls central banking, controls the entire global financial system, and therefore controls all political events in the world. When someone implies that there are private international banks that are operating beyond the control of the U.S. government, or the “Illuminati”, it threatens their entire belief system.
Phil,
Quote:
“Well many people want to believe that the FED and central banks have direct control over all the world’s money supply, or something to that effect.”
I DO NOT believe this. I am of the belief that there is a group of individuals that has control of the FED and the central banks. Many persons have stated that fact in the past. Among them were Woodrow Wilson, Franklin D. Roosevelt and Col. L. Fletcher Prouty.
Prouty was a very high-ranking individual in the United States Air Force, who served as Chief of Special Operations for the Joint Chiefs of Staff, under president John F. Kennedy. In his book, “The Secret Team,” Mr. Prouty spells out in no uncertain terms how a group of individuals and businesses wield absolute control of “events.”
President Eisenhower also alluded to this in his Farewell Speech to the American people, when he warned them of the “military-industrial complex.”
Thank you.