Hi Cruising, attempts at de-dollarization by the BRICs nations, and others such as Saudi and, possibly (?) Europe, would, as you state, result in substantially higher inflation in the U.S. Likely hyperinflation... Our debt loan is massive per https://i.ibb.co/0ZrhcfG/a123334.jpg . Could we therefore have hyperinflation resulting in a dialectical synthesis of the introduction of central bank digital currencies (which are close to being ready to unleash onto the public), which will then result in the greatest loss of individual freedom in human history?
Unfortunately politicians can be expected to use the societal anguish caused by severe price inflation to seize even more power while blaming the inflation on everything except the actual cause. Central bank digital currency (CBDC) will be just as fiat as national currencies are now so they won't do anything to resolve inflation but they may be peddled to a credulous public as some mystical cure. And you are correct, they open the door to a dreadful usurpation of our freedom. CBDC's offer a level of control that every self serving, megalomaniacal dictator lusts for.
Dear Cruising Economist, you started out with several posts a couple months back, and now it seems a holiday. I hope that we will see you come back. So I will ask a few questions too stimulate a new post.
There is much to learn about economic trends. You said economics entails understanding how human beings make choices. This must be the Micro-economic trends. It seems to rest on the idea of a market that is the consolidation of millions of individual rational choices. I wonder if that isn't a myth?
Giant hedge funds and bank holdings move such massive chunks of capital, that it can't help but alter the market. That might have been a side-effect in the past. But by now it is the only motivation for shifting capital. Manipulate the market, and always profit by that movement. The rest of humanity tries to ride on your back, or outguess you. But they make NO Independent Decisions. That is a polite way to say it. We stick with the myth of meritocracy. These guys make the largest returns because the are the wisest managers.
Other so well know it, that the richest man is the biggest gangster. Let me ask about Black Rock and Larry Fink. Is it true that his Assets Under Management recently went from $ 7 Trillion to $ 10 Trillion? If he buys your stock you're screwed, because then if you do not do exactly as he demands, he dumps your portfolio, and your company tanks overnight.
Let me list some points where I have questions:
1. You said the money supply has gone up by a factor of 10 since 2008. Certainly that is an unknown territory.
2. America has weaponized the dollar, such that it is no longer an international currency. It can't be spent in certain parts of the world, (or it is increasingly difficult.) Although certain world leaders are so in bed with the USA that they may not worry about the dollar as a weapon.
3. There may be an "Overheated Economy". I don't know what that means, so please give more detail.
4. When there is a systemic increase in prices, as opposed to price increases in a particular market - Isn't that difficult to determine? For instance if diesel fuel goes up, that affects every product that must be transported (all of them). Supply chains are so intertwined.
5. We know countries outside the west are trading in their own currencies, or in the Chinese Yuan, maybe 30% of world trade. That is concerning.
6. Fiat currency is backed by nothing more than confidence. But there is one more factor. It is that for some needs, there might be no alternatives. Let Me Ask About that. Is it true that there are many institutions that need liquidity and they must trade massive amount of capital daily? Banks, Hedge Funds, Investment brokers, Insurance funds, Pension funds, and Corporate entities needing to smooth out their cash flow. I'll give one example to illustrate the scope of it.
7. A while back I was trying to figure it out. I used US figures from 2015, when GDP was $ 18.2 T. Market value of domestic corporations was $ 29 T minus 25% in land yields $ 21.7 T in the USA, for investment in "means of production" in 2015. So what were the alternative (virtual) investments? ( I hope you can follow it, it is really very easy, and my margin of error can be huge and still make my point.)
$51 T Stocks out of world $ 111 T. $ 50 T Bonds, out of a world $ 128 T, and derivatives were at $ 1000 T. But all the $ 1000 T is not at risk. There may be various ways to calculate it, some say 10 times GDP, or $ 182 T. (Please check me out on this assumption.) So $ 283 T invested in the virtual economy, and $21.7 invested in the real economy???? I am asking:
Why Is There 13 Times More Capital In The Financial Economy Than In The Real Economy?
Is that what you call "duh"? Of course, there are 13 times more profits in the virtual economy than there is in the real economy, of value added! The real economy might be only the money laundering leg of corporate gangsterism. So if that giant market mechanism of world trading is really necessary, and there is no alternative even close to it; Will The US Dollar Fall? Regardless of how much of world trade is exchanged for Yuan. THAT IS MY QUESTION.
8. The other thing to consider; is there really that much market movement? How do you calculate the daily market turnover? I have heard of skimming, or "Ripple Trading", where banks of computers make 1,000's of trades per minute. All the major banks and funds engage with it. If these movements, (perhaps holding a position for one minute), are counted in daily turnover, then such a statistic is highly suspect.
Thank you for looking into, these, my doubts. Please make one or more new posts to focus in on these matters. I would have more questions, but I think it's enough for now.
Thank you for your well considered comments/notes. I appreciate your prompt to spend more time on posts, and I have been remiss in that regard. I'm working on major projects on my sailboat, which is my home, to prepare for full time cruising and passagemaking. I'm doing almost all the work myself and since I'm an amateur with regard to most associated skills it takes a lot of time and leaves me rather beat by the end of the day. So, that's my excuse but the truth is I could still set some time aside to write. I will make a point of doing so.
I've been thinking about addressing the fundamental motive force driving economic cycles since that may prove timely as people try to decide if they should have faith in a central bank engineered "soft landing". I'll get that posted soon. The fundamental insight I'll offer will differ from commentary you'll see in business news and academic circles, almost invariably some rendition of Keynesianism, but I think you'll see that the key force is readily understandable by anyone and actually remarkably obvious. However, you can of course judge that for yourself.
Thanks as well for your numerous questions. It's time to call it a day here so I'll save the questions for reference as I create future posts and address them where I can for all. I appreciate the guidance since I'm often not sure what readers are interested in discussing. For now I will note that we are likely at the end of four decades of massive monetary expansion and consequent financial distortions. As those distortions are inevitably wrung from the system some institutions, such as large financial firms, which currently enjoy remarkable influence within financial markets may be lucky to remain whole, depending on the strength of their balance sheet/state of leverage. But the economic fundamentals (driven by individuals making choices) will play out as they always have through financial history which is why I aim to focus on foundational insights.
Incidentally once the boat is prepared I'm looking forward to focusing on writing on Substack and producing cruising videos regularly. Hope you'll bear with me for now.
I am not much into country music, it's a miracle that I even knew who Tim McGraw is.
I am more of a world-fusion kinda guy; but as I was listening to this, I couldn't help noticing the contrast in the messages between country and hip-hop/rap: be good vs be angry.
As for your message, I cannot disagree. I am seriously considering to move some money to South-East Asia. I just don't have enough to move :)
More often than not country music is about home, heart and soul which anyone can relate to in their own way. And I can't think of any country song which encourages people to be angry, abusive or violent toward others.
Hi Cruising, attempts at de-dollarization by the BRICs nations, and others such as Saudi and, possibly (?) Europe, would, as you state, result in substantially higher inflation in the U.S. Likely hyperinflation... Our debt loan is massive per https://i.ibb.co/0ZrhcfG/a123334.jpg . Could we therefore have hyperinflation resulting in a dialectical synthesis of the introduction of central bank digital currencies (which are close to being ready to unleash onto the public), which will then result in the greatest loss of individual freedom in human history?
Unfortunately politicians can be expected to use the societal anguish caused by severe price inflation to seize even more power while blaming the inflation on everything except the actual cause. Central bank digital currency (CBDC) will be just as fiat as national currencies are now so they won't do anything to resolve inflation but they may be peddled to a credulous public as some mystical cure. And you are correct, they open the door to a dreadful usurpation of our freedom. CBDC's offer a level of control that every self serving, megalomaniacal dictator lusts for.
Dear Cruising Economist, you started out with several posts a couple months back, and now it seems a holiday. I hope that we will see you come back. So I will ask a few questions too stimulate a new post.
There is much to learn about economic trends. You said economics entails understanding how human beings make choices. This must be the Micro-economic trends. It seems to rest on the idea of a market that is the consolidation of millions of individual rational choices. I wonder if that isn't a myth?
Giant hedge funds and bank holdings move such massive chunks of capital, that it can't help but alter the market. That might have been a side-effect in the past. But by now it is the only motivation for shifting capital. Manipulate the market, and always profit by that movement. The rest of humanity tries to ride on your back, or outguess you. But they make NO Independent Decisions. That is a polite way to say it. We stick with the myth of meritocracy. These guys make the largest returns because the are the wisest managers.
Other so well know it, that the richest man is the biggest gangster. Let me ask about Black Rock and Larry Fink. Is it true that his Assets Under Management recently went from $ 7 Trillion to $ 10 Trillion? If he buys your stock you're screwed, because then if you do not do exactly as he demands, he dumps your portfolio, and your company tanks overnight.
Let me list some points where I have questions:
1. You said the money supply has gone up by a factor of 10 since 2008. Certainly that is an unknown territory.
2. America has weaponized the dollar, such that it is no longer an international currency. It can't be spent in certain parts of the world, (or it is increasingly difficult.) Although certain world leaders are so in bed with the USA that they may not worry about the dollar as a weapon.
3. There may be an "Overheated Economy". I don't know what that means, so please give more detail.
4. When there is a systemic increase in prices, as opposed to price increases in a particular market - Isn't that difficult to determine? For instance if diesel fuel goes up, that affects every product that must be transported (all of them). Supply chains are so intertwined.
5. We know countries outside the west are trading in their own currencies, or in the Chinese Yuan, maybe 30% of world trade. That is concerning.
6. Fiat currency is backed by nothing more than confidence. But there is one more factor. It is that for some needs, there might be no alternatives. Let Me Ask About that. Is it true that there are many institutions that need liquidity and they must trade massive amount of capital daily? Banks, Hedge Funds, Investment brokers, Insurance funds, Pension funds, and Corporate entities needing to smooth out their cash flow. I'll give one example to illustrate the scope of it.
7. A while back I was trying to figure it out. I used US figures from 2015, when GDP was $ 18.2 T. Market value of domestic corporations was $ 29 T minus 25% in land yields $ 21.7 T in the USA, for investment in "means of production" in 2015. So what were the alternative (virtual) investments? ( I hope you can follow it, it is really very easy, and my margin of error can be huge and still make my point.)
$51 T Stocks out of world $ 111 T. $ 50 T Bonds, out of a world $ 128 T, and derivatives were at $ 1000 T. But all the $ 1000 T is not at risk. There may be various ways to calculate it, some say 10 times GDP, or $ 182 T. (Please check me out on this assumption.) So $ 283 T invested in the virtual economy, and $21.7 invested in the real economy???? I am asking:
Why Is There 13 Times More Capital In The Financial Economy Than In The Real Economy?
Is that what you call "duh"? Of course, there are 13 times more profits in the virtual economy than there is in the real economy, of value added! The real economy might be only the money laundering leg of corporate gangsterism. So if that giant market mechanism of world trading is really necessary, and there is no alternative even close to it; Will The US Dollar Fall? Regardless of how much of world trade is exchanged for Yuan. THAT IS MY QUESTION.
8. The other thing to consider; is there really that much market movement? How do you calculate the daily market turnover? I have heard of skimming, or "Ripple Trading", where banks of computers make 1,000's of trades per minute. All the major banks and funds engage with it. If these movements, (perhaps holding a position for one minute), are counted in daily turnover, then such a statistic is highly suspect.
Thank you for looking into, these, my doubts. Please make one or more new posts to focus in on these matters. I would have more questions, but I think it's enough for now.
And thanks for your consideration.
.
Thank you for your well considered comments/notes. I appreciate your prompt to spend more time on posts, and I have been remiss in that regard. I'm working on major projects on my sailboat, which is my home, to prepare for full time cruising and passagemaking. I'm doing almost all the work myself and since I'm an amateur with regard to most associated skills it takes a lot of time and leaves me rather beat by the end of the day. So, that's my excuse but the truth is I could still set some time aside to write. I will make a point of doing so.
I've been thinking about addressing the fundamental motive force driving economic cycles since that may prove timely as people try to decide if they should have faith in a central bank engineered "soft landing". I'll get that posted soon. The fundamental insight I'll offer will differ from commentary you'll see in business news and academic circles, almost invariably some rendition of Keynesianism, but I think you'll see that the key force is readily understandable by anyone and actually remarkably obvious. However, you can of course judge that for yourself.
Thanks as well for your numerous questions. It's time to call it a day here so I'll save the questions for reference as I create future posts and address them where I can for all. I appreciate the guidance since I'm often not sure what readers are interested in discussing. For now I will note that we are likely at the end of four decades of massive monetary expansion and consequent financial distortions. As those distortions are inevitably wrung from the system some institutions, such as large financial firms, which currently enjoy remarkable influence within financial markets may be lucky to remain whole, depending on the strength of their balance sheet/state of leverage. But the economic fundamentals (driven by individuals making choices) will play out as they always have through financial history which is why I aim to focus on foundational insights.
Incidentally once the boat is prepared I'm looking forward to focusing on writing on Substack and producing cruising videos regularly. Hope you'll bear with me for now.
I am not much into country music, it's a miracle that I even knew who Tim McGraw is.
I am more of a world-fusion kinda guy; but as I was listening to this, I couldn't help noticing the contrast in the messages between country and hip-hop/rap: be good vs be angry.
As for your message, I cannot disagree. I am seriously considering to move some money to South-East Asia. I just don't have enough to move :)
More often than not country music is about home, heart and soul which anyone can relate to in their own way. And I can't think of any country song which encourages people to be angry, abusive or violent toward others.
i will read the entire post, but hey USD brought him to power!! SARKOZY was pro-EUR and is sitting in jail now. Do not fall for these lies