Global Depression 2022 - Time to do the Breadline Boogaloo!

[Tree]

This needs to be rammed through everyone's skulls. The US dollar is not a national currency. It's a private note, issued by a private bank, that is in theory insured by the faith and credit of the US government. But since the 1970s, the US government stopped backing the value of the Dollar. It's not backed by anything now.

How does this work in practice though? A lot like large companies being staffed with former and future high ranking government stooges.

Get out of the US dollar. Not one iota of my savings is in USD and none of your savings should be in it either. The US dollar is nothing more then worthless paper issued by a private bank, backed by nothing and running on inertia alone. If you are holding that nonsense you are a fool.

While I don't disagree with you that the dollar is trash, it is backed by the self interest of those who benefit from the scam that it is. Even with it being a scam, it can still hold value in an unprincipled way. Rather, it's not trash because it's not backed by anything; it's trash because it's backed by people who are evil whose interests inherently oppose that of good.

 

[Kujo Jotaro]

Yes I've been hearing a lot of "zombie" warnings for the past few years from several finance blogs I follow. I doubt if there's a painless answer to that problem. Let the companies fail and we're likely to trigger a bad recession. Prop the companies up and we're just kicking the can down the road. The Fed has really backed themselves into a corner with respect to QE and interest rates....

Here's a few more articles about the Fed's Liquidity Trap, Inflation vs. Deflation, and related macro issues.

Is The Fed Walking Into A Trap? (May 2020)
Inflation vs. Deflation – Which Is The Bigger Threat In 2022? (Dec 2021)

How many of these companies actually employ a significant number of people? I'd be willing to bet a large portion of them are just shells. The markets don't reflect reality at all, the average american could be reduced to eating every meal from a soup kitchen, but as long as Tesla is still making "progress" on their next vehicle the DOW will go up. The whole thing is propped up by sheer speculation, and the FED.

 

[Tree]

It wasn't businessmen merchant, many nobles were that.

The problem became when (((Happy Merchants))) took over.

You know, the bankers with the big noses.

I'm not sure if you're being serious, but personally I get the sense that, while the happy merchants are certainly evil, they are evil because they are the epitome of the unrestrained merchant. There can be no justice in a society run by a merchant class. A priest class rules through metaphysical truths, while a military class rules through physical truths. A merchant class can only maintain their position above the other two via trickery and deceit.

 

[Michael Janke]

This needs to be rammed through everyone's skulls. The US dollar is not a national currency. It's a private note, issued by a private bank, that is in theory insured by the faith and credit of the US government. But since the 1970s, the US government stopped backing the value of the Dollar. It's not backed by anything now.

theoretically, Kiwi Coins are a national currency and better than fiat currency, since its value tied to its weight in silver.
and it'll never inflate down to a price of practically zero either.

 

[George Lucas]

The best form of precious metals are bullion coins from stable governments. The purity doesn’t matter. A 14K earring for yourself and an 18K ring for your wife is just as good, accounting for the difference in gold weight. For jewelry/silverware, the hallmark matters (Tiffany & Co. has always been worth far more than the metal value, for example).

I think bars are only needed when you need a lot of fucking PM, which for most people should basically be never. I also don’t see any point in rounds unless you like the design (sorry Null).

 

[ToroidalBoat]

It's not backed by anything now.

So in other words, how much USD one has in digital form is just like the number of bananas one has in a Donkey Kong game.

 

[Meat Target]

So in other words, how much USD one has in digital form is just like the number of bananas one has in a Donkey Kong game.

Precisely.

And while we all know this, banks don't actually have as much cash on hand as is on their books. If there's a run on the bank or a failure, they get bailed out by FDIC.

The whole idea of paper currency is that "this note is an I.O.U. worth X amount of precious metals in the bank". Now that the dollar isn't backed by anything, we're all just trading I.O.U.'s.

 

[George Lucas]

Some retarded info going around in this thread.

The dollar is not ‘not backed by anything’. It’s backed by a right to pay debt, most importantly a right to pay U.S. income tax debt. That is value, whether or not that value is comparable to gold or silver is a matter of opinion. But to compare it to points in a video game is retarded.

 

[Sanshain]

Some retarded info going around in this thread.

The dollar is not ‘not backed by anything’. It’s backed by a right to pay debt, most importantly a right to pay U.S. income tax debt. That is value, whether or not that value is comparable to gold or silver is a matter of opinion. But to compare it to points in a video game is retarded.

Okay. What's tangible about the one that isn't tangible about the other?

 

[Hippopatumus]

Some retarded info going around in this thread.

The dollar is not ‘not backed by anything’. It’s backed by a right to pay debt, most importantly a right to pay U.S. income tax debt. That is value, whether or not that value is comparable to gold or silver is a matter of opinion. But to compare it to points in a video game is retarded.

Timmy has five apples. He can choose to eat the apples or he can trade them to Bobby in exchange for doing his homework. Ari suggests that he hold on to the apples and draw up "Apple Certificates" so that the certificates can be traded for homework jobs back and forth without causing wear and tear on the apples and to save on having to carry them around. Ari offers to redeem the certificates for apples whenever someone wants. This works for a while and "Apple Certificates" are freely traded for small jobs between classmates. The success of the certificates is lauded by everyone; the velocity of certificates soars and a cottage industry of homework cheating springs up. The entire class holds the "Apple Certificates" to have essentially the same value as the apples, and since they can be redeemed at any time, they place a lot of trust in the value of them.

Then one day, Ari decides that the "Apple Certificates" are so well trusted in the classroom economy, and that because basically nobody is actually coming to redeem apples from him, that he will save a step and not even bother to redeem apples anymore. The class grumbles at first, but they are so used to dealing in "Apple Certificates", and there is no real other option, so they just keep on with the status quo.

A few days later, it dawns on Ari; why not just create new "Apple Certificates" at will? Nobody will do anything about it. The class is so preoccupied with lessons and homework assignments that they don't have the time or the patience to argue with Ari about his little venture. And so he does. At first just one a week, which he uses to pay for Timmy to do his homework for him. He rationalizes this to himself and to his classmates as a good thing--after all, Timmy is now 1 "Apple Certificate" richer than he was before. Ari pats himself on the back and life goes on.

But, before too long, Ari gets greedy. It starts out slowly. He buys a candy bar from Bobby one day, and then pays Timmy to do his homework for him again the next. Pretty soon, he is making a new "Apple Certificate" every day. The class takes notice of the influx of certificates into their little economy and starts to demand two certificates for each homework assignment. And then soon after, four. Soon after that, 10. In short order the class is swimming in "Apple Certificates" and the class can barely keep up with the increases. Timmy, at one point having offered to do Bobby's homework for the rest of the semester for the price of five "Apple Certificates", is really feeling the pinch. He only has two left, and he can't even buy a candy bar with that anymore. The rest of the class quickly finds themselves in the same predicament. Their "Apple Certificates" are nearly worthless and their previously-agreed certificate loans are quickly proving to be a huge problem as time goes on.

At one point, in the middle of a squabble between Bobby and Timmy about debts owed, the teacher intervenes. He inquires about the reason for their argument and upon finding out the reason says "You know, this all started when you let Ari start issuing "Apple Certificates" at will, why don't you guys take it up with him? At that point the class has a moment of clarity about a number of problems that have befallen the class as of late. The problem all along was Ari! How could we be so stupid?

That afternoon, the class waited outside the school building for Ari and then hung him from a tree.

 

[Enig]

The best form of precious metals are bullion coins from stable governments. The purity doesn’t matter. A 14K earring for yourself and an 18K ring for your wife is just as good, accounting for the difference in gold weight. For jewelry/silverware, the hallmark matters (Tiffany & Co. has always been worth far more than the metal value, for example).

I think bars are only needed when you need a lot of fucking PM, which for most people should basically be never. I also don’t see any point in rounds unless you like the design (sorry Null).

On this note, using .999 pure silver as currency is beyond retarded, too. Pure silver tarnishes faster under regular handling and is more prone to damage due to it being softer than the historically accepted high limit of either 92 or 95 percent sterling, not to mention the fact you're using a grade of silver meant more for manufacturing and collectability to begin with meaning the costs in terms of labor are far higher since we've already established how easily mineable silver is running out and we blew a lot of the supply on shitty electronics that get chucked in the trash after a year.

 

[Only A Retard Sometimes]

On this note, using .999 pure silver as currency is beyond retarded, too. Pure silver tarnishes faster under regular handling and is more prone to damage due to it being softer than the historically accepted high limit of either 92 or 95 percent sterling, not to mention the fact you're using a grade of silver meant more for manufacturing and collectability to begin with meaning the costs in terms of labor are far higher since we've already established how easily mineable silver is running out and we blew a lot of the supply on shitty electronics that get chucked in the trash after a year.

US coinage was 90% with halves being 40% at then end.
that trashed silver is recycled to the tune of 200 million ounces a year. ~800 million ounces are mined a year. If the price of silver rises, more silver can be mined because it becomes profitable to do so and finding new deposits becomes financially viable.
also most silver isn't mined specifically. actual silver ore is rarer than gold. Most silver is produced as a secondary product in copper, lead and zinc mining.
Its like peak oil, the world has supposed to reach peak oil every year for like 50 years and every time new deposits are found or new extraction methods made that increases the recoverable amount. Silver and gold should be the same.
im not a expert so my opinion could be 100% of the retarded tree. consume at your own risk.

 

[Simple Moving Average]

Precisely.

And while we all know this, banks don't actually have as much cash on hand as is on their books. If there's a run on the bank or a failure, they get bailed out by FDIC.

The whole idea of paper currency is that "this note is an I.O.U. worth X amount of precious metals in the bank". Now that the dollar isn't backed by anything, we're all just trading I.O.U.'s.

Some retarded info going around in this thread.

The dollar is not ‘not backed by anything’. It’s backed by a right to pay debt, most importantly a right to pay U.S. income tax debt. That is value, whether or not that value is comparable to gold or silver is a matter of opinion. But to compare it to points in a video game is retarded.

Okay. What's tangible about the one that isn't tangible about the other?

Power comes from the barrel of a gun. The USD is backed by the military might of the United States.

See also: Saddam Hussein, Muamar al-Qadafi.

 

[Hippopatumus]

Yes but reminder, that military might in question has been driving submarines into underwater mountains and fleeing wars it started leaving behind billions of dollars in hardware

 

[Sped Xing]

Some retarded info going around in this thread.

The dollar is not ‘not backed by anything’. It’s backed by a right to pay debt, most importantly a right to pay U.S. income tax debt. That is value, whether or not that value is comparable to gold or silver is a matter of opinion. But to compare it to points in a video game is retarded.

If they think USD are so worthless, I'll gladly trade them internet stickers for dollars.

 

[Only A Retard Sometimes]

Yes but reminder, that military might in question has been driving submarines into underwater mountains and fleeing wars it started leaving behind billions of dollars in hardware

The surface of the moon is more known that the bottom of the sea. The last time one of the US navy's submarines hit a mountain it was in the same area and was due to the mountains being uncharted.
there is no excuse for the brass and administrations handling of Afghanistan however

 

[mindlessobserver]

Power comes from the barrel of a gun. The USD is backed by the military might of the United States.

See also: Saddam Hussein, Muamar al-Qadafi.

The military a paid volunteer force. Just ask the Roman's what happens to a professional army when the patricians can no longer pay them.

 

[teriyakiburns]

The military a paid volunteer force. Just ask the Roman's what happens to a professional army when the patricians can no longer pay them.

Not as simple as you're making out. In the early days of the Empire (and the republic beforehand, to a degree), the roman military was comprised primarily of roman citizens, who may have found a financial benefit in service, but who served primarily because they considered it their patriotic duty. Service guaranteed an improvement in social status and living conditions afterwards, at least for the survivors. Serve your five or ten years in the infantry and you could retire to the idealised life of the roman citizen, living on a farm with a couple of slavces who tended your barley, while you grew fat and made beautiful sons with your big-breasted wife.

You're probably thinking of the late Imperial period, when the Roman army consisted primarily of foreign mercenaries, who only served for payment of gold and nothing else. Their status within Roman society was irrelevant, as they would cross the border to serve the enemy when their term was up and the salary ceased. Citizens no longer served, whether for patriotic reasons or otherwise, because their needs were met by the Roman state, in the form of free food and entertainment, and their ambitions were reduced to little more than the acquisition of wealth and the trappings of urban status. This is all well documented in the writings of various Roman statesment over the centuries.

The foundation of a professional army is patriotism and duty, with money coming a short distance afterwards. If money is the first consideration of the rank and file, the army is no longer professional but mercenary.

 

[Sped Xing]

Patrician status was only really relevant in the Republic, and became much less so over the Centuries until, by Caesar's day, it was about as important as "My family was on the Mayflower."

In the early and middle Republic, service in the military was limited to propertied classes, and considered an honor and privilege. The Roman Army remained a militia even past the Punic Wars, though sometimes property qualifications were waived in times of great need. One of the way Rome bound her former enemies in Italy to her was allowing their citizens to serve as subordinate allied troops, and share in the glory and sometimes loot of her wars.

By the Jugurthine War, Rome's middle class had been so devastated by decades of foreign wars taking thr yeomanry away from their farms, and the predatory lending of the moneyed elite, that it was difficult to field conscripts at all. Gaius Marius pushed through reforms in order to recruit the landless poor and provide them with arms and equipment at state expense. This had the unfortunate side effect of socially indebting Marius' soldiers to him in thr patronage system, a feature/bug that men like Sulla and Julius Caesar would exploit. It was still a militia, however, and legions were raised as needed before being disbanded entirely at the end of conflicts. This remained true even through Actium.

It wasn't until the young Caesar became Augustus that Rome fielded permanent legions which would receive steady reinforcements as troops aged, with soldiers serving long, set terms.

 

[mindlessobserver]

And in that system the loyalty of the troops was solely dependent on the governments ability to pay its armed guards. This need is what triggers the final death spiral of a society. It happened to Rome and it happened to The Soviet Union. It's the Hobbesian dilemma.

The State rules by the sword, but who pays for the sword? The State. And where does the State get the money to make that payment? The people. Which strays into the argument that power is ultimately derived from the people. The simple truth is that as a societies social cohesion fails the State is required to invest more and more of its spending power to perpetuate its existence. A State with high trust in society has low security costs. It's doesn't NEED to use force to perpetuate itself as the people have trust in it and will willingly pay their taxes and not engage in anti social behaviors that make maintaining the system more costly.

This means money that would have been spent on security can instead be allocated to quality of life items. Like schools, roads, and so on. Further generating trust in the system.

Conversely a low trust society does not have this benefit. People do not trust the system and thus are unwilling to pay into it. Leading to more coercive methods of getting them to pay, further increasing the costs of extraction and reducing the net yields as people respond to the negative economic pressure by being less productive. Worse however is the incentivization of anti social behavior in the population that further adds security costs to the system and leads to more heavy handed approaches that engender resentment and more anti social behavior. This means more money is spent on security and less on investment in bettering society. Which only makes the situation worse.

Eventually a feedback loop is established. The costs the leviathan must incur to maintain the fear of its sword grow exponentially, with each dollar spent maintaining it engendered twice as many dollars in resistance. Be it refusal to support the system, anti social behavior or outright insurrectionism. Eventually the snake eats its own tail and there is no more money to invest. The entire productive output of the society is spent on a security apparatus that exists only perpetuate society.

And when that happens the end comes. How quick and how fast is not certain, but eventually the snake chokes on its own tail.