Ann if it weren’t for you I would have no idea what to make of anything, but the time difference here in NY somehow meant I read it before bed which was a terrible idea. Next time I will wait til morning coffee and maybe won’t have nightmares. 😘
1. Though '80% of all cross-border trade (outside Europe) is invoiced in US dollars,' China's CIPS now settles more daily transactions (2 trillion) than SWIFT.
2. 'There are other dictators: President Putin'. Putin's powers are modeled on Macron's, as is Russia's constitution. And Putin is the most-elected leader on earth with the highest popular support. US Presidents have–and use–far more dictatorial powers than almost any leader on earth.
Hi Ann -- thank you very much! I must read the entire book first... but still, may I ask another question: In this book, on page 15 (if I am correct), at the beginning of the chapter, you include a quote from Alfred Mitchell Innes' 1913 paper. The author of that paper used these terms, too, by saying that "credit, and credit alone, is money." Hence, this paper influenced your way of thinking. I am curious: how did you discover A. Mitchell Innes? Via Ingham's 2004 book or otherwise?
I guess the point being that, prior to 1971, countries with +ve USD balances could, and sometimes did (France in particular) demand the gold (I suspect that France was on a mission to maximise it's gold-holding to either set the Franc up as reserve for intra-EEC trade or had plans for a gold-backed 'proto-Euro', but that's another story). The point here (I think) is that the pre-1971 gold-backed USD is outside the notion of a pure fiat currency, and thus not a good fit with the argument that it can't be treated as a commodity.
In retrospect, did the rule of South Africa’s own Balshazzar (John Vorster) portend the demise of Apartheid? Or, Prescott Bush’s collaboration with Hitler, when in the employ of Brown Brothers Harriman, portend the later autocratically-inclined US presidents?
Any government that does not exercise its sovereign power to be the exclusive creator and allocator of the money, the most vital prerogative of democratic self-governance, will be controlled by those who do. As Frederick Soddy wrote in 1934, "To allow money to become a source of revenue to private issuers is to create, first, a secret and illicit arm of the government and, last, a rival power strong enough ultimately to overthrow all other forms of government." We need an electoral revolution. https://howardswitzer.substack.com/p/organizing-an-electoral-revolution
I find Trump’s plans interesting tbh. Clearly their goals are: increase domestic production, increase geopolitical heft, outcompete China. And these plans don’t reconcile due to $$ hegemony. So a lot of the policy is exploring ways to devalue the $$ without tipping the system into panic. Hence - Trump tariffs then backs off as bond markets / stock markets react. This has now been framed as ‘Taco’ - Trump always chickens out. But it’s kind of working? The $$ is falling but there is no collapse. I agree entirely on tipping points & thresholds & it’s an extremely risky strategy. But - as many have pointed out - it’s going to be really tough for capital to flee wholesale from the US because where will it go? So in many ways, this kind of seesaw motion coupled with, possibly, debt restructuring, may allow the US to lower the price of its currency without losing its hegemonic status. It’s an absolute needle to thread, but it’s using trade policy as a tiller to get the $ down without destroying the system. On crypto & tax breaks, I have 2 views. One is: Trump’s a corrupt idiot with completely muddled thinking 2. Someone’s trying to stoke inflation deliberately. Debt gets inflated away, $$ falls, he wins the election (Reagan style) then they dump Powell, move away from inflation targetting & instead try & rebalance the economy. Of course, they still want social conservatism, small gov & big money tribute. So they create a Nazi/Soviet style economy with state-directed production (using favoured broligarch suppliers) & extremely strong authoritarian control but they rebuild an autarkic economy aimed at outcompeting China (using tariffs to keep the $ low). And honestly, they might succeed? Or they hit a threshold, markets collapse & there is a catastrophic dollar crash. Global deflation etc No way to print your way out because all faith in the $$ gone. Anyway, at least something is happening? We couldn’t go on with this lunatic system🤷🏻♀️
Thanks Ann! And I'll add another endorsement of your valuable book <i>The Production of Money</i> (which I long ago reviewed <a href='http://www.stanleydundee.com/well-and-truly-buried.html'>here.</a> May I suggest however that a more forceful formulation of money is <q>a claim on the resources of society</a> rather than <q>a promise to pay.</q> The problem of who gets to create money is at the root of our social problems. Leaving it in the hands of a banking oligarchy (joined now with a tech oligarchy) is not going lead anywhere but to dystopia.
Ann if it weren’t for you I would have no idea what to make of anything, but the time difference here in NY somehow meant I read it before bed which was a terrible idea. Next time I will wait til morning coffee and maybe won’t have nightmares. 😘
Fascinating analysis. Two niggles:
1. Though '80% of all cross-border trade (outside Europe) is invoiced in US dollars,' China's CIPS now settles more daily transactions (2 trillion) than SWIFT.
2. 'There are other dictators: President Putin'. Putin's powers are modeled on Macron's, as is Russia's constitution. And Putin is the most-elected leader on earth with the highest popular support. US Presidents have–and use–far more dictatorial powers than almost any leader on earth.
Yeah, hard to run while falling out a window…
In which books of yours, I can read more on this line of your thinking: “Money is credit; and credit is money.”? Thanks
Oleksandr….Thank you for that enquiry…Perhaps you could try The Production of Money…written some time ago, but still popular. Obtainable here: https://www.versobooks.com/en-gb/products/396-the-production-of-money
SHAMELESS ENDORSEMENT -
- That was the remarkable book which brought me here! 😃
Hi Ann -- thank you very much! I must read the entire book first... but still, may I ask another question: In this book, on page 15 (if I am correct), at the beginning of the chapter, you include a quote from Alfred Mitchell Innes' 1913 paper. The author of that paper used these terms, too, by saying that "credit, and credit alone, is money." Hence, this paper influenced your way of thinking. I am curious: how did you discover A. Mitchell Innes? Via Ingham's 2004 book or otherwise?
Via Geoff Tily- I think in his book Keynes Betrayed...
I appreciate your reply very much!
p.s. Just realized, Tily is an economist to follow https://x.com/geofftily. He is now with the Trades Union Congress.
P.S. This Tily's talk about his book, made in May 2007, is a nice, short review of his ideas. https://www.postkeynesian.net/downloads/events/Tily_25_May_2007.pdf
"the US dollar, which has since 1971 acted as the world’s reserve currency"
So: after the 1971 severance of the gold standard rather than after the 1944 Bretton Woods accords?
Apologies if I am getting confused - sending warmest solidarity wishes! 😃
I guess the point being that, prior to 1971, countries with +ve USD balances could, and sometimes did (France in particular) demand the gold (I suspect that France was on a mission to maximise it's gold-holding to either set the Franc up as reserve for intra-EEC trade or had plans for a gold-backed 'proto-Euro', but that's another story). The point here (I think) is that the pre-1971 gold-backed USD is outside the notion of a pure fiat currency, and thus not a good fit with the argument that it can't be treated as a commodity.
I very much appreciate your explanation here; I definitely, absolutely failed to think that one through fully!
Sending warmest solidarity wishes! 😃
In retrospect, did the rule of South Africa’s own Balshazzar (John Vorster) portend the demise of Apartheid? Or, Prescott Bush’s collaboration with Hitler, when in the employ of Brown Brothers Harriman, portend the later autocratically-inclined US presidents?
P.Bush: read all about it: Trading with the Enemy by Charles Higham
I’ve read it. An eye opener. Thank you anyway.
Meanwhile, on Planet Earth: many others: Persia (Achaemenid Empire), Egypt, Greece, Zhou Dynasty in China, Vedic India, Olmec, Mixtec, Polynesian, Carthage, Kush…
While I love a good story… and bibles are very important to some…
There are so many stories in the rise and fall of so many civilizations.
Clutching one book like it has all the answers makes no sense to me. Especially when it’s used to harm others.
https://en.m.wikipedia.org/wiki/List_of_Iron_Age_states
Damn, time to get off my soapbox. Heck I replied before I even got to the US dollar. Weewweé
🐣🙃☝️👇🕯️😵💫💧💦
Excellent read…
Any government that does not exercise its sovereign power to be the exclusive creator and allocator of the money, the most vital prerogative of democratic self-governance, will be controlled by those who do. As Frederick Soddy wrote in 1934, "To allow money to become a source of revenue to private issuers is to create, first, a secret and illicit arm of the government and, last, a rival power strong enough ultimately to overthrow all other forms of government." We need an electoral revolution. https://howardswitzer.substack.com/p/organizing-an-electoral-revolution
I find Trump’s plans interesting tbh. Clearly their goals are: increase domestic production, increase geopolitical heft, outcompete China. And these plans don’t reconcile due to $$ hegemony. So a lot of the policy is exploring ways to devalue the $$ without tipping the system into panic. Hence - Trump tariffs then backs off as bond markets / stock markets react. This has now been framed as ‘Taco’ - Trump always chickens out. But it’s kind of working? The $$ is falling but there is no collapse. I agree entirely on tipping points & thresholds & it’s an extremely risky strategy. But - as many have pointed out - it’s going to be really tough for capital to flee wholesale from the US because where will it go? So in many ways, this kind of seesaw motion coupled with, possibly, debt restructuring, may allow the US to lower the price of its currency without losing its hegemonic status. It’s an absolute needle to thread, but it’s using trade policy as a tiller to get the $ down without destroying the system. On crypto & tax breaks, I have 2 views. One is: Trump’s a corrupt idiot with completely muddled thinking 2. Someone’s trying to stoke inflation deliberately. Debt gets inflated away, $$ falls, he wins the election (Reagan style) then they dump Powell, move away from inflation targetting & instead try & rebalance the economy. Of course, they still want social conservatism, small gov & big money tribute. So they create a Nazi/Soviet style economy with state-directed production (using favoured broligarch suppliers) & extremely strong authoritarian control but they rebuild an autarkic economy aimed at outcompeting China (using tariffs to keep the $ low). And honestly, they might succeed? Or they hit a threshold, markets collapse & there is a catastrophic dollar crash. Global deflation etc No way to print your way out because all faith in the $$ gone. Anyway, at least something is happening? We couldn’t go on with this lunatic system🤷🏻♀️
Thanks Ann! And I'll add another endorsement of your valuable book <i>The Production of Money</i> (which I long ago reviewed <a href='http://www.stanleydundee.com/well-and-truly-buried.html'>here.</a> May I suggest however that a more forceful formulation of money is <q>a claim on the resources of society</a> rather than <q>a promise to pay.</q> The problem of who gets to create money is at the root of our social problems. Leaving it in the hands of a banking oligarchy (joined now with a tech oligarchy) is not going lead anywhere but to dystopia.
https://www.facebook.com/share/r/1FzXrJpAzB/?mibextid=wwXIfr