While this story is a year old already, Why the global financial system is about to collapse remains scarily accurate in its analysis of the problems faced by fiat money systems around the world:
The global financial system is about to collapse because the US dollar is about to collapse. The US dollar is about to collapse because of a simple economic fact that no one has the power to change or conceal. The fact is that the spontaneous remonetization of the precious metals is a Nash equilibrium.Why the global financial system is about to collapse
I don’t know who John Law is (He isn’t this guy) but he made some interesting points. Good luck finding him if you have questions for him.
Money, money, money. What is money?
That is the question that really needs answering. It is clear to me now that money is not any of the things that it has been proposed to be up to this point in history. It most certainly isn’t the thing that the author calling himself John Law said it was back when I first ran across that article. How do I know this? Because his predictions turned out to be false, like so many predictions have done over the years. We humans are poor predictors of the future.
I temporarily gave a home to the ideas he voiced in the article because I thought the ideas were worth discussing. In 2019 I decided that time had passed and I removed the bulk of the article from the blog so as to frustrate the delusions of others who might be reading the article here (there were a suspiciously high number of hits on the article while it was live on Blogspot) Follow the link if you want to read the rest of the article. It is still there on Archive.org, in the same place where I rediscovered it after the blog the article was written on was deleted.
I’m no longer convinced that John Law understood economics better than I did at the time, and I’ve learned a lot more about economics in the decade since stumbling across that article. Average people like the idea of gold as money, want their money to be valued like gold is, but they aren’t willing to carry the stuff around in order to trade with it, they aren’t inclined to pay the costs of maintaining the systems and the costs of maintaining reserves simply to protect against the debasement of the currency that they want tied to the value of gold.
Humankind needs to come to some new understandings about what money is and why we need it, but I don’t see a return to gold as the bulwark behind the value of money anywhere in the cards. It just isn’t practical to have huge troves of precious metals sitting around gathering dust in treasuries around the world. This is especially true when electronic systems could be created that could do the same job without taking up the real estate gold requires while doing the job.
When I say, electronic systems I’m not talking about cryptocurrencies, at least not any of them that existed in 2019. They have their own downsides including the energy costs of mining for the currency itself. Blockchain technology is interesting and could possibly be made to serve the purpose we need in controlling the hoarding of money, but that proposition hasn’t been proven yet. In the meantime I may drag out a few more snippets of John Law’s Why the global financial system is about to collapse as examples to rebut in future articles on the the subject of money. Like all predictions, only time will tell.