By Guest Blogger Ryan Lewenza
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That is a more complicated and arcane concept to explain than it appears. Also the character of money changes over time. The world’s oldest minted coin dates back to China around 640 BC. As our society has evolved and become more complex, money has changed from metal coins, to paper currencies and to a bunch of numbers on a bank ledger. And now we have cryptocurrencies, which again is changing the character of money.
Money is so much more than the cash in our jeans or what you use to purchase your Timmies coffee. It’s everything! It’s what our entire system and existence is underpinned by. Just since 2000 total global wealth has tripled to $463 trillion dollars. This could not have happened without the creation of money (and human ingenuity and capitalism).
Before money commerce was transacted through a bartering system. I’ll pay you one goat for five pounds of wheat. But that is not an efficient, durable and stable system to transact in, especially as the world’s population approaches eight billion people.
Money, or currencies, sometimes used interchangeably, then became the tool in which people transact, selling different goods to each other or selling goods for one’s labour. Money in itself has no real value. As some say, it’s not worth the paper it’s printed on. Money is a concept or system that requires belief and confidence in the underlying money/country to have any real value.
So let’s look at some of the key aspects of money.
Functions of money
For money to work and have value it must provide three key functions.
First, money needs to be a store of value. For example, the money we earn from our jobs and investments has to hold its value and be there in the months and years ahead. That’s why inflation is such a big concern as it erodes the purchasing power of money over time.
Second, money is a unit of account. Money needs to provide a common measure of value to be widely accepted and facilitate transactions.
Third, money is a medium of exchange. This is an instrument or system used to facilitate the purchase and sale of goods and services between parties.
Types of money
There are three main types of money. Hard or commodity money is money whose value comes from the commodity or metal that’s it made of. Fiat money is what we all know and use and is a type of paper currency that is declared legal tender by a government. It’s essentially backed by the full, faith and credit of the issuing government. Importantly, it is not backed by any tangible asset (i.e., gold). Finally, there is bank money which consists of credit that banks extend to customers/depositors.
Where does money come from?
The government and treasury of a country obviously is the starting place as they create and regulate the currency.
Let’s examine the US economy where the Federal Reserve and US Treasury are responsible for the control and issuance of US treasuries/dollars. Total US debt is over $31 trillion, which is the sum total of all the country’s deficits over the years. No doubt this is a big contributor to the money supply but this is secondary to the impact that can come from the banking sector.
Now we need to talk about banks, credit and the fractional banking system. It’s important to note that when we buy stuff we’re just transferring money from one pocket (payment) to another (receipt). These transactions have little impact on the amount of money in circulation. If the individual/company receiving that money deposits it into a bank, then we can see an increase in the money supply.
Fractional-reserve banking is our current system where banks take in a deposit, then lend out a good portion of those funds, while keeping a reserve amount of safe and liquid deposits to meet short-term withdrawals from customers.
This bank lending through mortgages, credit cards and commercial loans, leverages the client deposits, which has the effect of creating new money and increasing the money supply. In fact, commercial banks have a greater impact on the money supply than governments.
Purchasing power of money
The value of money can and does erode over time, resulting in a decline of purchasing power. As government’s print new money, this leads to an increase in the money supply, which in turn, drives the price of goods and services higher.
Look at the chart below.
It tracks the purchasing power of the U.S. dollar by adjusting it for the rise in US CPI inflation. For example, one U.S. dollar could buy 10 bottles of beer in 1933. Today that same one dollar can buy you one small McDonald’s coffee.
As the Fed and US Treasury issues more bonds/dollars, this helps to drive up inflation and lowers the purchasing power of the U.S. dollar. Someone should remind Jerome Powell and Tiff Macklem of this the next time they feel inclined to implement more quantitative easing and the printing of more currency.
Not sure about you but we’re getting diminishing returns from all this money printing/QE so maybe we need to consider an alternative approach.
Purchasing Power of the U.S. Dollar
Source: Visual Capitalist
Money and gold
Historically, many currencies were backed by gold. Great Britain as far back as early 1800s and the US in the later 1800s. In 1944, 44 countries negotiated the Bretton Woods agreement, which helped create a new economic system that helped standardize currency exchange rates and where gold became the basis for the US dollar. The US dollar was pegged to the gold price and the other countries’ currencies were then pegged to the US dollar.
The goals of Bretton Woods was to create a stable and efficient foreign exchange system. The agreement also lead to the creation of the World Bank and IMF. It was a big event. This system remained in place until 1971 when President Nixon shocked the world (it’s called the Nixon shock) by announcing that US was going delink the dollar from gold. This radical and historic decision changed the entire monetary system, by moving to a fiat currency, not based on gold or an asset but rather by the guarantee of the government issuing the currency. Everything changed after that.
Bretton Woods System
Source: WallStreetMojo
That’s a lot that we covered today on the topic on money. In my next blog I’m going to continue this theme by examining the role of reserve currencies and whether the U.S. dollar is at risk of losing its role as the world’s dominant reserve currency. This isn’t the most exciting of topics but it’s absolutely critical to understanding how the global economy and markets function.
Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Investment Advisor, Private Client Group, of Raymond James Ltd.
114 comments ↓
A timely foray into the theory of money as inflation rears its ugly head.
Brace for the Crypto promoters…..
In today’s world money is nothing more than a communication tool among people and countries
113 crowdedelevatorfartz on 05.20.23 at 9:04 am
@#110 Whr.Dover
A MW = 1,000,000 watts
A Mwh = 1,000,000 watts/hour
………..
Poor worked over can’t get it straight. Or he just won’t or can’t see his error.
However your math is close but slightly off. It watts X hours. Not watts / hour.
Just as a car does not make 300hp per hour .
About 3 years ago people were talking about the End of Cash.
I think Sweden would go Cashless, they said.
The end of under the table transaction.
In Canada, we have new bills with the King on it.
In God we Trust.
Everyone else still pays with Cash.
And BTW, I’m aware that Cash is only a form of money.
But it still has legs.
My favorite Chinese restaurant in Richmond is cash only
1 crowdedelevatorfartz on 05.20.23 at 10:25 am
A timely foray into the theory of money as inflation rears its ugly head.
Brace for the Crypto promoters…..
——————————
As long as you continue to pay 16 bucks for a Subway, inflation will indeed rear its ugly head.
Money! (((Tail wagging)))
Real estate!! (((Tail super-wagging)))
There’s only one hard money that can’t be printed out of thin air or manipulated by a central regime….
BITCOIN
@#5 Ponzies post-inflationary purview
“As long as you continue to pay 16 bucks for a Subway, inflation will indeed rear its ugly head.”
+++
That Subway inflation “robbery” really has you upset.
Did they run out of “past the due date” Coffee Crisps and Coke at the Dollar Store again?
Your diabetes must be flaring…..
Thanks for the blog Garth
Thanks for the post Ryan
I have a hard time understanding value of money over time. I think keep it simple is a better approach
Yes it’s nice fancy chart. But what does it tell me?
You’re comparing beer to coffee and nothing else.
I think a cup of coffee in 1933 was a nickel so now a small coffee is a dollar. Okay Starbucks is more but hey we are on a budget people. And I get every 7th one free. Just saying.
hourly wage in 1933 was 25 cents so a cup of coffee was 20 percent of an hourly wage.
Now minimum wage varies by province but let’s say $15
So a cup of coffee is 7 percent.
Am I better off now?
So let’s compare housing which is What this blog is all about
My parents bought a house in 1957 for $16,000
My parents earned 4,000 a year, both had full time jobs and moonlighted to make the mortgage payments
Or 25 percent of their salary
Now the house is worth 800,000
Average salary in Ottawa is 88,000 so a couple making $172,000 are they moonlighting?
Anyway so 21 percent of the salary
You get the point.
Are they better off?
Now you also have technology deflation. Remember how much a TV cost in the 90s. And now you can get bigger better and of course cheaper now.
Bottom line I always ask myself, do I feel I am better off today than before inflation.
And the simple answer is yes.
Am I better off than 30 years ago of course.
Ask yourself would you rather make 25 cents an hour
Or 15 dollars an hour
Have a great long weekend.
Remember my math might not be exact and to all you ya butters out there, you forgot to count this or that and everything in between.
Keep it simple.
Oh yea mortgage rate was 5 percent fixed for 25 years.
So what your saying is the money tree seeds I bought online are fake!?
right now and a real pint of British beer is 1pound 71. Good use of money. Thats what its for. Cant drink pop in a pub in 604 for that.
“Finally, there is bank money which consists of credit that banks extend to customers/depositors.”
That ‘credit’ is the type of money that resulted in so many sheep becoming house slaves. It has never made sense to me that banks literally create money out of thin air and people have to work 8 hours a day to pay the banks back with real money they earned. No wonder Canadian banks grew to the massive size/wealth that they are today. It no different to medieval times when the Kings/Lords would take pretty much everything from the peasants. Banks are heavily protected by the governments who facilitated the biggest modern day scam univerally accepted by sheep world wide, most dont even question how banks just come up with this money
By the way Furz, we have blackflies a few days a year at our oceanside house. They get real bad a few weeks a year in the woodlot behind the house.
You have drug addicts in your path day in and day out!
I like to look at “money” this way.
Say I produced labour that the market valued at $100k.
I then purchased goods and services that cost $80k.
So I have produced excess labour to what I consumed, represented by that $20k in savings.
This money, appearing as a number in my bank account,
is labour that is stored for future use.
As JP Morgan once put in a congressional testimony;
“Money is Gold and Gold is Money, everything else is credit”
Fiat currencies are currency, not money
That was 111 years ago. People travelled by horse, too. – Garth
Re: #8 crowdedelevatorfartz on 05.20.23 at 11:14 am
Their meatball sub nearly doubled in price in one fell swoop. Add a few slices of peperoni and that makes up the difference.
#74 Wrk.dover on 05.19.23 at 6:34 pm
#98 Bdwy on 05.19.23 at 2:30 am
73 Wrk.dover on 05.18.23 at 8:15 pm
It would be nice to have a carbon credit for the 20 megawatts of solar power we produced on our roof
_______
Sorry, no.
225 W panels are typical.
You’d need 120,000+ panels to make 2mW.
Or you have a very large roof.
But perhaps you mean mW hours.
_________________________________
Here’s the thing Folks; Read what I had said above….
When I log into my acct. with Enphase (ENPH.NASDAQ, Market cap 22.5 Billion USD), whom I assume know more than Bdwy does about what our panels have produced, the info they give me is:
20.5 Megawatts produced so far since installation.
(Word for word )
Arguing with the greater fool, I inadvertently dropped an h into the story.
Perhaps currency will become based on energy, so this post could be reason to pay attention to the terminology!
I’m right, Bdwy is wrong, bottom line.
#7 SOMETHINGS UP!! on 05.20.23 at 11:05 am
There’s only one hard money that can’t be printed out of thin air or manipulated by a central regime….
BITCOIN
——————————————————————
The most inefficient and extremely wasteful use of energy as a payment system. Makes little sense and is destined to go to zero.
Bitcoin is the best money ever invented. The only variable now is acceptance over time.
Basically, it is a system that operates on faith.
But I’m not so sure it’s the government spending that creates inflation as much as the fact every Tom, Dick and Harry carries a money printing machine in their wallet, and most people I know carry several credit cards.
Another, but more recent development, and I wonder if anybody on this blog (Shawn maybe?) sees how the amortization extension of mortgages could possibly lead to an expansion of the money supply and contributes further to inflation?
Victor Llearna “That ‘credit’ is the type of money that resulted in so many sheep becoming house slaves. It has never made sense to me that banks literally create money out of thin air and people have to work 8 hours a day to pay the banks back with real money they earned.”
First, no one put a gun to homeowners head to buy a home and take on a mortgage. Second, barely anyone can afford to buy a home without a mortgage. Your anger should be directed more towards CBs who cut rates to zero which drove RE prices to record highs. – Ryan L
Excellent Ryan. This is an exciting topic. Even Jesus had lots to say about money, especially how it motivates people. And today, with the onset of digital currency, we see the dangerous ability of government to use it for control.
What astonishes me is the speed and ease that new money is created at.
Person uses their credit card for a purchase, and bingo, cash for the store and a liability for consumer are created out of this air. End of 2022 this accounted for $765.7B of consumer debt.
Govs just as bad. Gov Canada wanted to spend cash fast so from Apr 2020 to Dec 2021 the BoC bought Government of Canada Bonds. Over that period, the amount went from $78B to $433B. As of May 2023, BoC still holds $313.4B of those bonds. That purchase alone pushed their liabilities up from $119B (steady at that amount for years) up to $366B!
https://www.bankofcanada.ca/rates/banking-and-financial-statistics/bank-of-canada-assets-and-liabilities-weekly-formerly-b2/
Chrysta and Justin needed fast cash for CERB and their pet projects, almost $1/2 Trillion of them, and Bingo, there it is courtesy of the BoC.
Commercial banks print money for mortgages out of thin air. Mortgage debt end of 2022 stood at $2.1 Trillion. At least it can be argued that eventually that turns into wealth after a few decades, RE value was $7.9 Trillion end of 2022.
The $ measures are BS. Take M1++ claiming $2.1 Trillion in money supply in Jan 2023. Which you know is BS after reading the above paragraphs.
————————-
Too many entities creating money out of thin air, quickly and with ease.
There does not seem to be much oversight to me, controls for those processes.
Tighter controls on money creation practices are needed I believe for the nation as whole.
Yes, yes this ara bevy of institutes etc. that claim to do that on behalf of Gov but with all the money in the system I am not convinced they are doing their job.
Eventually too much fast and easy debt will affect the economy. So far Cdn consumers fine but I wonder how much this can last?
#12 ‘Victor’ – I think you missed the bit in Ryan’s post where he stated ‘money is a concept’. The fact folks work 8+ hours a day is the concept that their labor is worth ‘X’, will be compensated by ‘Y’ & the value of ‘Y’ is then used to purchase goods/services. As opposed to lugging a goat, bushel of wheat or whatever else might be used as a medium of exchange to make one’s purchases. The end result of inflation is that one must work longer to purchase the same good or service. Or negotiate higher compensation value for said labor in order to continue to be able to purchase the desired goods or services in the same quantity as before.
Great Topic. This article is right on the Money.
Relevant to this topic is the Bank of Canada balance sheet and how it soared during the pandemic but more recently is shriveling fast, which no one mentions or gives it credit for.
Fantastic chart here, click the “radio buttons” (those over 50 will know what I mean to choose total assets which peaked at about $572 billion and its now down to $366 billion. Over $200 billion reduction. Did this amount to erasing the earlier printing of money? If not, why not?
https://www.bankofcanada.ca/rates/banking-and-financial-statistics/bank-of-canada-assets-and-liabilities-weekly-formerly-b2/
Great job in explaining money today Ryan.
Looking after your hard-earned dollars: Understand what you are paying for, when it comes to mortgage insurance.
An insured mortgage is often referred to as a high ratio loan mortgage, it is one that is covered by mortgage default insurance, which is different from private mortgage protection insurance, it is your cost when borrowing for a home, if you are putting down less than 20% towards your purchase. This type of mortgage insurance is mandatory for you to fork over the additional payments, you are paying for insurance to protect the other guy.
I know it makes no sense when the bank tries to explain to you, by paying additional money makes it easier for you to pay up each month – go figure? Its all about the other guy (lender protection), the big machines called banks protection. If you should pass away while your home is under a mortgage, then the balance is due to the lender from your estate. Bottom line is, you have no choice, pay up or forgo your dream home.
If you paid down more than 20% on your home mortgage purchase, then you would be in the conventional mortgage loan category.
Mortgage insurance protection is just another fancy word for life insurance, it is quite different, it protects your loved ones from any monies due for mortgage, in the event of your death. There are other add-ons like disability or critical illness insurance, of course its optional and comes at a cost to you.
Ask your lender, if they offer other choices outside of CMHC, you may get a surprise in different rate cost, a couple of the bigger competitors outside of CMHS are Sagen (formerly Genworth) and of course Canada Guaranty.
Quote of the day: The value of your money, is none other than your purchasing power
#9 Money, Money, Money
“I have a hard time understanding value of money over time. I think keep it simple is a better approach”
Well said!
someone’s loss while others gain
FOR IMMEDIATE RELEASE
Friday, May 19, 2023
Man Charged for Alleged Participation in $45M CoinDeal Investment Fraud Scheme Involving Over 10,000 Victims
A Nevada man has been charged for his alleged participation in CoinDeal, an investment fraud scheme that defrauded more than 10,000 victims of over $45 million.
Bryan Lee, 57, of Las Vegas, will make his initial appearance in federal court today in Las Vegas.(doj)
https://www.justice.gov/opa/pr/man-charged-alleged-participation-45m-coindeal-investment-fraud-scheme-involving-over-10000
Digital currency allows peeps like police, CRA to trace illicit activities and tax cheats. Cash is also dirty. Too many germs. Ugh. Banks hate cash too. It might put Brinks out of business, but let’s toast cash. It’ so yesterday. Has ‘Boomer’ written all over it.
Thanks Ryan; fine discussion.
The best thing about money is the friendship and loyalty it buys.
I know Garth hates gold as an investment BUT when there was a gold standard, Govs could not print or spend money more than they had gold in their vault.
Tends to control easy and speed of money creation, limits it.
Of course, US Gov said screw that we are bankrupt and in essence, can you Commercial Bankers (private syndicate of investors) lend us a dime?
Well, JP Morgan et. al. only too happy to oblige not enough gold in the vaults Gov USA and from that emergency action eventually came about the:
US Fed *
Dec 23 1913. Morgan died earlier that year before its formation.
—————-
J.P. Morgan Documentary: How One Man Financed America
https://youtu.be/5jjdErDkDZE?t=1311
I started it at the Gold Panic of 1893, cut to the chase so to speak.
US Fed history, by them (well, the San Francisco branch).
https://www.frbsf.org/education/teacher-resources/what-is-the-fed/history/
* US Federal law requires national banks to be members of the Federal Reserve System and to own a specified amount of the stock of the Reserve Bank in the Federal Reserve district where they are located.
[Let you imagination wander about the interests of the US Fed members]
If you like robber barons, social decline and depressions, you will love the gold standard. – Garth
Pink -Floyd Money.
https://m.youtube.com/watch?v=-0kcet4aPpQ
10 Jack TGK on 05.20.23 at 11:42 am
So what you’re saying is the money tree seeds I bought online are fake!?
——————————
Haha
One thing that most of us learned at an early age is:
That money does not grow on trees.
But some just never get it.
19 tafj on 05.20.23 at 1:04 pm
Bitcoin is the best money ever invented. The only variable now is acceptance over time.
————————-
If acceptance is the only variable, then Bitcoin is in trouble .
I remember seeing a few lonely Bitcoin machines in the malls.
Seem to have disappeared.
Just like with Tesla, people get tired of fads quickly.
Thanks for the primer on Money. Interesting. Look forward to Part 2.
Ray Dalio on the economy which includes a section on money. His 3 rules (30 min mark) dont bode well for Canada.
https://www.youtube.com/watch?v=PHe0bXAIuk0
#30 Sail Away on 05.20.23 at 1:58 pm
Thanks Ryan; fine discussion.
The best thing about money is the friendship and loyalty it buys.
———————-
Sure.
“I have many fair weather friends,
But their friendliness depends,
On how I do”
Cat Stevens
17 Wrk.dover
“20.5 Megawatts produced so far since installation.
(Word for word )
Arguing with the greater fool, I inadvertently dropped an h into the story.
Perhaps currency will become based on energy, so this post could be reason to pay attention to the terminology!
I’m right, Bdwy is wrong, bottom line.”
——————————————————
I had to go back and read the earlier comments to see what the disagreement was about.
Bdwy explained it correctly and clearly.
It sounded like you understood the units error. Now it looks like you don’t.
The power produced by your array is about 4000 Watts.
(= 4 kw = 0.004 MW)
The total energy produced by your array over 3 years is
about 20 Megawatt hours. (20 MWh)
Apparently accountants look after your account(!), not
engineers.
#3 Bdwy on 05.20.23 at 10:40 am Enphase gives you a feel good number, not very useful, but it’s big. Divide it up over the life time, watcha get? 3Wh? Maybe the wover guy can calculate that without the fancy meter.
Hold on to your horses, … and what about the future money of Canada? What about Carolyn Rogers announcement and The CBDC Plan?
Yes, … this plan:
“The consultation opened today and runs until June 19.”
Bank of Canada launches public consultations on a digital dollar
https://www.bankofcanada.ca/2023/05/bank-canada-launches-public-consultations-digital-dollar/
How ’bout them apples? Any comments on that? [ Let controversy erupt! ]
Best,
F.S. – Calgary, AB.
#33 Ponzius Pilatus on 05.20.23 at 2:23 pm
10 Jack TGK on 05.20.23 at 11:42 am
So what you’re saying is the money tree seeds I bought online are fake!?
——————————
Haha
One thing that most of us learned at an early age is:
That money does not grow on trees.
But some just never get it.
$$$$$$
Unless you’re an avacado narco. ;-)
cutting ties
Real estate agents made fake offers to spark bidding wars
https://www.ctvnews.ca/video?playlistId=1.6405683
A La Presse investigation revealed they allegedly had friends and family members submit bogus offers on homes they were selling to create a sense of competition among legitimate buyers to drive up prices.
Girouard is one of the stars of the reality TV show “Numero 1.” She and Dauphinais-Fortin are now facing an investigation by the real estate governing board of Quebec (OACIQ).
On Wednesday, RE/MAX Quebec announced it was cutting ties with the two agents.
“Such behaviour goes against our values and the rules of the OACIQ, in addition to overshadowing the rigorous work of the members of our industry,” RE/MAX Quebec said in a statement.
Paper money is something that we raccoons love to use as gum to clean out teeth, notwithstanding the chemicals.
#67 ts on 05.19.23 at 5:57 pm
#7 ElGatoNeroYVR on 05.19.23 at 3:17 pm
2) nationalize the houses where owners default …
________________
Hmm. Sounds a lot like communism. Is this what you really want? Is this a sign of a healthy society, economy?
——————-
Was thinking more the Singapore model.
Yes ,it comes really close to socialism and it is sad we got here ; reality is that the Canadian voters have spoken where it matters the most ,at the ballot box.
Those of us that think different will either have to wait and hope for a miracle in the next election or start planning to move our money and join the expat community.
“dynamic” pricing
“A cheat bidder is not interested in winning the auction,” she said. “A cheat bidder is interested in inflating the price and attracting more people [to the auction].”
“Cheat bidders can be real people who are hired or motivated to bid on an item to influence the auction. A cheat bidder can also act through a software program designed to influence the auction.'(cbc 2015)
chatgpttrump chatgptmusk possibilities seem endless
Stanford Researchers Create Cheap AI Model That Beat ChatGPT At Its Own Game
Building an AI bot like ChatGPT is an expensive task and requires large amounts of data sets that need to be processed to add accuracy and speed to the model. However, a Stanford research team has created a tool that performs just like ChatGPT, but only cost $600 (₹49,606) to build. Alpaca AI was developed on an open-source language model, highlighting how easily AI tools can be replicated.
Once the LLaMA 7B model was functional, Stanford researched asked ChatGPT to consider 175 conversations between itself and human counterparts to generate more in the same style – 20 at a time. All this was supported by OpenAI’s APIs, allowing the team to use 52,000 sample conversations in post-training. The generation of this bulk data cost less than $500.
could anyone now build a language model? And the answer is increasingly leaning towards “yes.” Just yesterday, OpenAI CEO Sam Altman explained why he was scared of AI and why regulations are the need of the hour.
https://www.indiatimes.com/technology/news/stanford-researchers-cheap-ai-model-beats-chatgpt-596501.html
#18 Ronaldo on 05.20.23 at 12:54 pm
#7 SOMETHINGS UP!! on 05.20.23 at 11:05 am
There’s only one hard money that can’t be printed out of thin air or manipulated by a central regime….
BITCOIN
——————————————————————
The most inefficient and extremely wasteful use of energy as a payment system. Makes little sense and is destined to go to zero
——————————————————————
And you think the current Fiat system is efficient?
Do a count of all the energy all the banks collectively use. The buildings, the paper, the digital footprint it all creates from all those employees.
Go do some of those enery usage calculations and get back to me.
“Before money commerce was transacted through a bartering system.”
There is concrete evidence of futures contracts existing >5000 years ago, or during what we know as the Bronze Age.
The evidence was found in the fertile crescent, where agricultural revolution helped foster the growth of the major early civilizations.
It sounds like a better way to run a civilization than with “money” that can be wished out of thin air and lent out freely, which has caused great inequality as it has enriched some borrowers far in excess of the value they’re actually contributing to society.
It doesn’t comes as a surprise that the youth of today don’t want to bust their hump for minimum wage and never get ahead when they can just learn from the millionaires how to leverage into real estate and make an easy living rentseeking.
#11 Sitting in a pub in Hounslow … on 05.20.23 at 11:57 am
“right now and a real pint of British beer is 1pound 71. Good use of money. Thats what its for. Cant drink pop in a pub in 604 for that.”
Not saying you’re lying or anything, but I’m travelling in the UK right now ant your price for beer is a bit low. It’s more like four quid a pint (for swill, should you like that).
A cup of coffee in McD’s was about £1.20 in a highway service area rest stop. We find UK prices £=$ or worse making them 30-50% higher. Real estate prices are ridiculous.
Price list from a cheap chain of pubs in UK.
RE: #7 SOMETHINGS UP!! on 05.20.23 at 11:05 am
There’s only one hard money that can’t be printed out of thin air or manipulated by a central regime….
BITCOIN
=======================================
Bitcoin was literally created out of thin air. Or, more accurately, even thinner electrons!
Bitcoin can be manipulated. It was easily manipulated when it was created, but now it would require control of more than 50% of the Bitcoin miners to manipulate it. A major botnet-virus could do it. Not likely, but still possible.
Great reading, Ryan! Look forward to the second installment.
Nora Lenderby link: A large breakfast has risen from £5.90 to £6.34. Large? Hold the mushy peas. Please.
If you like robber barons, social decline and depressions, you will love the gold standard. – Garth
——————————————————-
Well let’s see. If you take out the decade or so of the US Civil war pre and post a few years, from the time President Jackson killed the first Central Bank proposal in the 1830’s until the creation of the Fed 80 years later, the following was the case;
– Central Govt. was constrained by a Constitution and rule of law
– Gold Standard kept inflation at zero
– Steam power was harnessed, with steamships and railroads dropping transportation costs by many orders of magnitude, resulting in massive real wealth creation
– Telecommunication was invented and expanded exponentially
– Electricity was invented, at least at a commercial scale, and expanded exponentially
– Petroleum Oil discovery and processing was invented, saving whales from extinction for lamp oil
– Internal combustion engines were inverted to use the unused part of petroleum not needed for lamp oil.
– Massive deflation in prices of many consumer foods and goods, like 80% for chicken in a grocery store, leading to increases in real wealth
– Massive gains in construction technology with milled lumber and steel, with huge improvement in household living accommodations
– Powered air flight
– The freeing up a farm labour due to industrialization, leading to huge advances in Science, Medicine, Arts…
– Canada was able to walk two steps behind all this and follow right along, adding its own contributions, including finding a way to finance a national railroad without printed fiat currency.
The list goes on and on. Maybe the robber barons weren’t all bad for society?
Give it up. It’s dead. Forever. Garth
EU Adopts First-ever Crypto Regulation Framework
In a landmark move, the European Union has taken a significant stride towards regulating the crypto sector by adopting a new regulatory framework for crypto-assets, issuers, and service providers.
https://www.occrp.org/en/daily/17651-eu-adopts-first-ever-crypto-regulation-framework
US Ophthalmic Company to Pay US$487 Million in Penalties for Kickback Scheme
An ophthalmic supply company was ordered by a U.S. federal court on Monday to forfeit US$487 million for paying kickbacks to eye surgeons performing cataract surgeries.
Precision Lens, and its owner Paul Ehle, violated the U.S. False Claims Act as well as the Anti-Kickback Statute by paying kickbacks to ophthalmic surgeons to promote the company’s products for cataract surgeries.
A federal jury concluded that the defendants were linked to 64,575 fraudulent health insurance claims, amounting to a bill of $43,694,641.71. As all the claims were eventually reimbursed by Medicare, the American government’s national health insurance program, the total cost ultimately came at the taxpayers’ expense.
The False Claims Act, also known as the “Lincoln Law,” makes it illegal for individuals and entities to defraud the U.S. federal government. The minimum civil penalty is $5,000 per false claim, plus three times the amount the government was defrauded by.
s proven at trial, the Defendants provided kickbacks to physicians in various forms, including travel and entertainment. The United States identified multiple examples of trips, including high-end skiing, fishing, golfing, hunting, sporting, and entertainment vacations, often at exclusive destinations. For many of the trips, the Defendants transported physicians to luxury vacation destinations on private jets. These included trips to New York City to see a Broadway musical, the College Football National Championship Game in Miami, Florida, and the Masters golf tournament in Augusta, Georgia. The Defendants also sold frequent flyer miles to their physician customers at a significant discount, enabling the physicians to take personal and business trips at well below fair market value.
“This judgment affirms Congress’ intent to hold individuals and companies accountable when they use illegal kickbacks to defraud federal healthcare programs,” said Bahram Samie, Deputy Civil Chief for the United States Attorney’s Office for the District of Minnesota. “Medicare beneficiaries are entitled to know with certainty that their physician’s decision-making has not been compromised by a private flight, expensive ski-trip, or any other unlawful inducement. This office is committed to investigating misconduct and recovering funds unlawfully obtained from federal healthcare programs.”
https://www.justice.gov/usao-mn/pr/court-enters-487-million-judgment-against-precision-lens-and-owner-paul-ehlen-paying
Better to go direct to the source
Read Marx Das Kapital Volume 1 on money…
https://en.wikipedia.org/wiki/Das_Kapital,_Volume_I
#38 Wattson on 05.20.23 at 2:56 pm
Wattson, come quickly, you messed up your units.
Nothing boring about “currency”.
Awesome, Ryan! Great summary.
Lets not forget small money experiments conducted in the 80’s (from the dupe factories down south) that pit humans with an intent of gaining $$$ against other humans – results? Look it up!
Or, early indigenous cultures describing an entity that made white man want to kill just to gain these precious coins.
Not to be a Debbie downer (sorry to all those reading whos name is Debbie….blame Mom) but our Messiah may be causing more harm than good…
Speaking of ‘good’, early morning snuggles are back!! And smiles were off the charts today!
Og
#37 Dr. V on 05.20.23 at 2:55 pm
17 Wrk.dover
Sorry Dr V, that’s a nope.
Bdwy clowned it up pretty good when he said it would take 120,000 panels at 225W each to generate 2mW. Bdwy also gooned the units and prefixes. mW are milliWatts not mega. 120,000 panels at 225W would peak at 27MW, which isn’t even in the discussion here.
I think dropping the h from 20 MWh is pretty forgivable. Much more so than trolling a respected elder who made one wee gaffe.
Garth,
Gold standard is not necessarily deflationary. The Bretton Woods quasi-gold standard was a period of broad, sustained, improvement in living standards, during which our society became more egalitarian.
I’m not saying that the post-WWII boom could have gone on forever. What I am saying is that a gold standard is no obstacle to strong, broadly distributed, economic growth.
You can have a gold standard with robber barons, but you can also have a gold standard with a mixed-economy welfare state–or anything in between.
It has become apparent during the past quarter-century that robber barons and speculators thrive even more under a fiat money system than under gold standard.
Fiat money also undermines the English style of constitutional government. What limits the power of government in the English system is the control of the purse. With fiat money, it is much easier for the government to borrow, which makes it easier for the government to postpone or escape the scrutiny of Parliament and public. Under a gold standard money is harder to get, and the government has to ask the people for funds. If the government does devalue the paper currency, they can’t hide that fact, which means the devaluation immediately becomes an open matter of public debate–which it should be.
Now whether it’s politically possible to deviate from the rigid worldwide fiat-money orthodoxy, I can’t say. But I say that orthodoxy is bad, and we should try to change it.
56 ogdoad on 05.20.23 at 5:50 pm
Or, early indigenous cultures describing an entity that made white man want to kill just to gain these precious coins
########
Interesting, I wonder what motivated the indigenous tribes to kill each other?
#4 Ponzius Pilatus
Cash is all but gone in Canada. Sure technically it still exists but try paying for everything in cash it’s almost impossible to carry that much money in your pocket.
I remember the $1000 bill, it was discontinued in 2003 I think. There is still $2 billion of those bills still in circulation because they’re amazing to facilitate big drug and gun deals. Governments hate having cash floating around because it’s untraceable and gives criminals the opportunity to rob others.
I personally haven’t heard of anyone being robbed in a very long time and that’s due to the fact most people don’t carry more than a few dollars in their pocket. Now it’s all cyber crime. Fix one problem create another.
57 Faron
“Bdwy clowned it up pretty good when he said it would take 120,000 panels at 225W each to generate 2mW. Bdwy also gooned the units and prefixes. mW are milliWatts not mega. 120,000 panels at 225W would peak at 27MW, which isn’t even in the discussion here.”
———————————————————-
I wasnt worried about the actual numbers F. I dont know what power a panel is capable of generating.
Neither do I care about the proper abbreviation as long as the intent is clear.
It was the concept of energy vs. power, which equals energy over time. This is where the confusion started.
It is imperative to differentiate between watts and watt-
hours. You can’t “inadvertently drop an h” into the story without changing the entire meaning.
Wrk.dover’s array is not capable of producing 20 MW of power. It is capable of producing 20 MWh of energy.
Consider these similarities / echoes:
1. Major shifts in global capital and trade flows that attracted little notice start to matter in terms of currency valuations, inflation, monetary and fiscal policy and geopolitics: check.
2. After decades of modest inflation, inflation not only rises but is sticky rather than transitory: check.
3. Major shifts in the power structure of global oil markets: check.
4. Cultural and social shifts become divisive, reaching destructive extremes: check.
5. A global superpower is ensnared in a hot war in which the other side is supplied by a superpower rival: check.
6. Political scandals upend the cozy arrangements of political elites: check.
7. A new wave of geopolitical rivalries arise between allies and rivals alike: check.
8. Stock and bond markets keep rallying like nothing’s changed, but since things have changed, each rally fails: check.
Let’s focus on #8: market participants continue assuming that the past 15 years are an accurate guide to the next 15 years, unable or unwilling to face the enormity of the changes that have already occurred in the fundamental structures of state and private-sector finance and the economy. (I discuss these in my book Global Crisis, National Renewal.)
These shifts guarantee the next 15 years will not follow the low-risk scripts of the past 15 years. I’ve explained here many times that systems have their own dynamics, and so they don’t respond to our desires or opinions or our policy tweaks. No matter how many policy tweaks you throw at diminishing returns, for example, returns still diminish–though you can mask this reality temporarily behind extremes of stimulus and other financial sleight of hand.
Tightly bound systems, i.e. highly centralized systems, unravel far more abruptly than loosely bound systems, no matter how many fiscal or monetary policy tweaks you throw at the system.
Path dependency and dependency chains direct what happens next and constrain policy options no matter how many policy tweaks you throw at the system.
Emergent systems exhibit characteristics that are different from those exhibited by each of the component systems. This means that we can combine financial “innovations” that generate X and economic policies that generate Y and end up with Z (for example, the whole shebang collapses in a heap.) What If the Whole Shebang Unravels?
Emergent systems exhibit characteristics that are different from those exhibited by each of the component systems.no matter how many policy tweaks you throw at the system because policy tweaks don’t actually add any meaningful feedback loops or change the tightly bound centralized system. All the tweaks can do is modify a parameter here or there–meaningless to the fundamental dynamics of the system as a whole.
What’s different now is our ability to make realistic assessments has effectively collapsed. As a society and economy, we only seem capable of careening between two states:
1. Complacency / denial
2. Panic
In Sweden, yes, they were going to be the first cashless society. Before government made their final move to ban all cash they engaged professionals to conduct a one year study on all aspects & ramifications. The study group came back with a recommendation that the Swedish government maintain cash financial transactions in society & at least 20% of money supply in cash. The reason for this was that in case of a breakdown in the electronic world, (EMP, bug, catastrophe?] common people would have an immediate alternative to transact business. We’ve seen this when hurricanes hit down south. Communication systems collapse & the commoners without cash have no means to buy water,gas,batteries & food. I guess you could always go into Walmart & plunder, but maybe they’ll beat you to it & have guards with guns behind the plywood windows.
Forget crypto, fiat and gold. It’s time to return to the wheat standard.
a concept that requires belief
unlike real estate where nobody believes agents
REAL ESTATE BROKERS UNDER INVESTIGATION FOR SUBMITTING BOGUS BIDS ON HOMES
https://www.iheartradio.ca/cjad/two-real-estate-brokers-under-investigation-for-submitting-bogus-bids-on-homes-1.19683453
(When do they go under investigation for ongoing fraudulent DOMs?)
#31 Dolce Vita
If you like robber barons, social decline and depressions, you will love the gold standard. – Garth
—————–
You know, I did bait you with my first sentence.
And you couldn’t resist could you. THAT was good Garth.
Disdain on the obvious. A very good thing.
So far, in my view the US Fed acting responsibly. Sometimes late to the table but a person has to understand what an awesome responsibility they carry on their shoulders.
————-
The fate of the World’s economy held in their hands.
12 people on the FOMC. Only beef I have is so much power concentrated in such few hands.
Mercifully, they reside in the World’s greatest Democracy and its largest economy.
The Greatest Show on Earth. Thank God for that.
#51 AM in MN
THAT was very well written despite his Lordship’s objection.
During that period there was a concentration of economic power in the hands of private syndicate investors (Banks).
Not always will they have the best interests of the People in mind. Why in that period many monopolies were broken up, e.g., Standard Oil.
—————-
The US Fed:
“… they exist because of an act of Congress. Their purpose is to serve the public.”
Solace in the last 4 words of that sentence.
#60 I’m stupid
Fair enough.
Though:
$116.4B
notes in circulation as of May 17, 2023 per the BoC. In 2020, there were about $90B. So notes not going away any time soon.
Go here, to the left of the chart click on Notes in circulation:
https://www.bankofcanada.ca/rates/banking-and-financial-statistics/bank-of-canada-assets-and-liabilities-weekly-formerly-b2/
—————–
There must be a lot of stuffed mattresses in Canada?
Less coins in circulation, probably for the best.
I recall when not a Senior citizen I dreaded going shopping for food at the local grocery store when, I think it was on Wednesdays, they had Seniors Discount Day.
Invariably, I would get stuck in the checkout line behind somebody’s very old Gran with arthritic fingers and the like behind me.
And with great certainty, I knew she had shopped so the bill would end in $xx.99.
Out comes the change purse. 3 quarters, 2 dimes (some times 4 nickels for fun) and 4 pennies later, all taken out at a snails pace with great arthritic care, I at times was compelled to give a Loonie to the clerk and have Gran call it a day!
On the house. Give her the penny change.
But alas, most of these Seniors were lonely it seemed to me, chatted up a storm with the Clerk and took their time getting the quarters, pennies, etc. out of their change purse.
At some point, I learned to enjoy the process and pondered that one day that will be me.
Paleo here with a memory (and a bit of compassion).
70th? Are the Guest Bloggers ensconced in their Lake Rousseau manses? :-)
What is Munny? I trade my labour for Munny and then hand 65-75% of it over to the corrupted governments.
After a certain level taxation is theft.
Case in point: double land transfer taxes for kandos even, in my prefecture. Kando units are not land.
As a bonus the local school boards post signs onto the construction sites, they are full up, no positions open to the new students.
—- —
The war will never end. Too much is at stake. Learn the Long Game lads.
https://time.com/6281063/pentagon-accounting-error-ukraine-arms-funding/
Pentagon Says Multi-Billion Dollar Accounting Mistake Means More Arms Funding for Ukraine
63 fishman on 05.20.23 at 7:16 pm
“I guess you could always go into Walmart & plunder, but maybe they’ll beat you to it & have guards with guns behind the plywood windows.”
////////////////////////////////////////////
On my 30 or so vacations in the States, I’d never bothered to go into a Kohls store, wouldn’t have been able to tell you what they sold.
Missed the bus on a recent day trip to Paso Robles, had a decision to make, stand at the bus stop for an hour until the next one come, or go for a little lookie in this big box store across the street.
Went in, did what all undesirable shoppers do, hit the discount section hard.
Found a couple of Sonoma Tank Tops for 2.99 each and when I went up to the cashier to shell out the mucho money, she looked distracted and made a comment to the cashier at the next till over.
“There he goes again.” she stated.
She then explained that shoplifters come in a few times a day and load up the cart and just wheel it out the front door.
I said why doesn’t security stop them, but then she proceeded to explain the law about theft up to 750 bucks is not a serious offence anymore, so they decided to get rid of the security guards.
I wasn’t going to chase after anyone with my glass ankles, so I did what I do best and brought up a useless point for her to stew on.
“Nordstrom is going paws up in Canada” was my throwaway line, but it was surprising enough for one of her eyebrows to arch more than The Sydney Harbour Bridge.
So, in summary, if I was ever in the States and a catastrophe happened, I would go the the nearest big box store, take what I needed and put the money on the counter, if I didn’t have any money I would make sure to add up the amount of the items, keep it below $750 USD and put on IOU note on the front door.
Scratch that, the front door would probably be kicked in, I would just ask one of the looters to grab me a couple of packets of Red Vines licorice…
M48BC
Shurly 71st.
Comrades hang your heads in shame. Time for your next Struggle Session. All the old culture must go.
(Would be a real shame if the local hicks launched local displays from the beds of their F-150s)
https://calgary.citynews.ca/2023/05/18/calgary-canada-day-no-fireworks/
The City of Calgary is going without fireworks at this year’s Canada Day celebrations.
Instead, there will be an “enhanced pyrotechnic show” featuring what they describe as a “visually stunning display of lights and sounds” that will be launched from the main stage at Fort Calgary during the headliner act.
The city says it recognizes the cultural sensitivities around fireworks displays in relation to Truth and Reconciliation.
Thx V. You understand high school physics. Worky does not.
Energy vs power.
I suspect a Joule is a foreign concept to him.
And faron smarty pants, yes I repeated his 20 as 2. My typo. Units should be capital M for mega. Good catch thx. I slipped.
But any engineer not still moist behind the ears knows that panels are lucky to make 75-80% of rated power in the very best of real world conditions. 100W panel? 75 useful watts if you aim it exactly perfectly
So…. that number of 120,000 panels will be dammed near 20MW spot on.
You learned something today!
…..
From the NRC
For conventional generators, such as a coal plant, a megawatt of capacity will produce electricity that equates to about the same amount of electricity consumed by 400 to 900 homes in a year.
https://www.nrc.gov
…
Btw here in BC base rate is near $0.10/kWh. Ergo 100 bucks per MWh.
You’ve saved 2000$ over 3 years at Bc rates. $3200 or so at NS average rates. At 1000/ year savings. Did you pay about 40k for that system???
This is a solar / physics blog , right?
¨It’s what our entire system and existence is underpinned by.¨
The younger you are when you learn this, the greater the odds you won´t end up a greater fool.
It feels like we’re at 11 o’clock on the Interest Rate Rise clock.
I put up this chart the other day
https://www.global-rates.com/en/interest-rates/central-banks/central-banks.aspx
Direction is still uppa in most places.
From the scrubs from Down Under.
“Hurry up and hike: NAB boss says more rate rises coming.
NAB chief Ross McEwan predicts one or two more cash rate rises and says the RBA needs to get to the top of the cycle soon so people ‘know where their money is going’.”
Pretty funny stuff, the bank boss thinks people want to know where their money is going.
It’s all going to the bank, buddy, but you already knew that.
Cinderella always makes sure all the central bankers are home before midnight…
M48BC
@#Floppie
“I said why doesn’t security stop them, but then she proceeded to explain the law about theft up to 750 bucks is not a serious offence anymore, so they decided to get rid of the security guards.”
+++
I guess its cheaper than Canada’s “catch and release” on bail for prolific offenders……
Creating money through the treasury or loans doesn’t in itself cause inflation does it? I thought the fiat and loan based money supply had to match GDP or prices will go up or down. If the money supply stayed the same with a growing GDP, prices would go down (and money would be worth more) since the same amount of money is used to purchase more stuff. And, if the money supply increases faster than GDP, prices go up since more money is chasing fewer goods.
Ryan:
Thank you as always for covering the basics. There is always something to learn by reading this blog. The Nixon Shock was more clearly covered than what I had previously read. The arrogance of the American Government over the lives of others never ceases to amaze me.
Money
Get away
You get a good job with more pay and you’re okay
Money
It’s a gas
Grab that cash with both hands and make a stash
New car, caviar, four star, daydream
Think I’ll buy me a football team
Money
Get back
I’m alright, Jack, keep your hands off of my stack
Money
It’s a hit
Don’t give me that do goody good bullshit
I’m in the high-fidelity first-class traveling set
And I think I need a Lear jet
Money
It’s a crime
Share it fairly, but don’t take a slice of my pie
Money
So they say
Is the root of all evil today
But if you ask for a rise
It’s no surprise that they’re giving none away
Away, away, away
Speaking of money and banks, this article was not good news:
Canadian banks faced a difficult quarter ahead of earnings releases: RBC
https://www.bnnbloomberg.ca/canadian-banks-faced-a-difficult-quarter-ahead-of-earnings-releases-rbc-1.1922616
What got me, besides their forecast of lower Earnings per Share near across the board, was this comment:
“Over the longer term, the analysts … predict revenue improvement to be “partly offset by normalizing PCLs [provision for credit losses],” which they said would create an approximate five-per-cent growth to core earnings per share on average in 2024.”
Hard to believe credit losses will offset growth.
2023 going to be a tumultuous year, that’s for sure and just when you thought recovery was on that way, YTD:
https://www.google.com/finance/quote/BNS:TSE?comparison=TSE%3ATD%2CTSE%3ACM%2CTSE%3ARY%2CTSE%3ANA&window=YTD
Looks like recovery will have to wait another year. Oh well …
Ryan, great article.
You stopped short on the elephant in the room. There has been a loud and inconspicuous absence on this blog for a long time about Central Bank Digital Currency. CBDC.
It’s time for a dialogue on it, since it appears that the roll out is coming.
Please give us your thoughts. Thx
#61 Dr. V on 05.20.23 at 7:09 pm
I see what your are saying. Frankly, Bdwy didn’t exactly explain it “correctly and clearly”. Overall, it’s an embarrassment that the four of them (if you include crowdedelevatorfartz and wattson) couldn’t get it straight. Sheesh.
Have a nice weekend. We toodled out to Category 12 brewing the other day for a nice 60k bike ride over 2.5 hr. Strava tells me I was putting out a mere 100W (yep, I’m a slow roller). I ate about 1100 Cal of burger and beer. Shall we let steerage do the math on that one?
Off Topic.
The reaction by the ENTIRE EUROPEAN UNION to your PM’s admonishment of Italy on sex etc., the NEXT DAY:
https://twitter.com/EU_Commission/status/1659831574958059521
One popular newspaper posted this front page take on Trudeau, “Buffon”:
https://twitter.com/joshryanjames/status/1660073392416980992
Another Italian reminded Trudeau of his hypocrisy, no admonishment, when talking to State Leaders that practice death or incarceration of gay sexual orientation:
https://twitter.com/LucioMalan/status/1659817317453144067
Just keep that PM of yours home or put a ball gag on him when abroad Canada.
He’s embarrassing.
You don’t understand the new monetary reality. According to the geniuses in control of the WEF Canada Franchise and our current Liberal Party, money is a political rather than a fiscal instrument.
Krystal Freeland brought home and taught us that currency can be manufactured in any amount according to governments whim. Modern Moneyary Theory, invented by the super minds who precise over the Liberal Cabinet, is a fluid unit of Marxist Change Theory.
When money is of no use anymore we’ll simply ‘substitute’ to nonmoney and begin sharing according to our social credit. You’ll own nothing and be happy.
thanks for doing this… it is important to understand the big picture and this is part of it.
@#Faron
“Overall, it’s an embarrassment that the four of them (if you include crowdedelevatorfartz and wattson) couldn’t get it straight. Sheesh.”
+++
Which IS more painful?
Your massive intellect suffering the daily imbeciles?
Or your massive ego imitating humility?
The inquisitive rabble want to know….
Money is subject to the laws of supply and demand. If you create too much of it, the value goes down (inflation). Conversely, if you create too little, the value goes up (deflation). Deflation is also problematic as it can lead to a depression, as consumers stop spending in anticipation of lower prices in the future.
Someone should attempt to explain this to Justin Trudeau and Chrystia Freeland.
59 Don Guillermo on 05.20.23 at 6:30 pm
56 ogdoad on 05.20.23 at 5:50 pm
Or, early indigenous cultures describing an entity that made white man want to kill just to gain these precious coins
########
Interesting, I wonder what motivated the indigenous tribes to kill each other?
—————-
And I wonder what motivates the Russians and the Ukrainians to kill each other?
It’s human nature.
#69 Dolce Vita on 05.20.23 at 8:44 pm
Less coins in circulation, probably for the best.
————-+++.
Soren,
Maybe you’ve been speaking Italiano for too long.
But in proper English, it’s still “fewer coins”.
82 Faron
“Strava tells me I was putting out a mere 100W (yep, I’m a slow roller). I ate about 1100 Cal of burger and beer. Shall we let steerage do the math on that one?”
————————————————————-
This article makes it simple, with the assumption of the inefficient human engine
https://www.welovecycling.com/wide/2020/05/14/how-to-convert-watts-into-calories-burned-on-the-bike/
Looks like you needed another half hour :(
Thanks. Enjoy your weekend too.
Oh Ryan, ignore Bitcoin at your own peril. 14+ years and counting now. Not going away. Not controlled by any central party, not prone to human corruption, not malleable by flaky governments with broken finances diluting their currencies to zero.
Just mathematical precision.
The perfect asset.
To me Bitcoin is digital property. It is superior to real estate, US treasuries, US dollars, gold (lol) and other forms of wealth like art (illiquid, clumsy).
To all the “crypto detractors”: I’m with you. There is only one “crypto” and that is Bitcoin. It has never been “hacked”, never duplicated nor corrupted. Yes there are thousands of worthless shitcoins printed out of thin air that claim to improve Bitcoin and many bad actors like FTX, Binance. But these are not Bitcoin, nor does Bitcoin rely on them.
@#18 Ronaldo on 05.20.23 at 12:54 pm
>The most inefficient and extremely wasteful use of energy as a payment system. Makes little sense and is destined to go to zero.
The most pedestrian of the idiotic talking points, no surprised to find such sentiments in the comments here.
Do you know what consumes more energy in JUST the United States than the entire global Bitcoin mining network: video game consoles, for one.
But I’m sure burning your favourite fossil fuel to play juvenile games into your 30s and 40s is a terrific use of energy (and your time).
The data centres that host terabytes of all sorts of garbage, your most prized pornography, Amazon AWS, “the cloud” all consume more energy than the Bitcoin network, by orders of magnitude.
In other words, sit in the corner, and put on the dunce cap.
The environmental cost via electricity consumption to secure the Bitcoin network for the perfect digital commodity for the world is well worth it.
Ryan. Is it coincidence that no mention regarding how government loves inflation for what it does to the value if its giant debt over time and allows them to continue the spending spree and rack up more debt? I’m shocked no-one in steerage brought it up. Will you address this in Part 2 please. Most of us continue to wonder ”how can government let this happen to us?”…when all we ever need to do is FOLLOW THE MONEY. I worked hard all my life and saved for my retirement and now this manufactured inflation is stealing thousands from me quietly while the numbers in my accounts don’t change….follow the money kids!
‘CAVEAT’- I guess I could be way off base…I’m not a money professional…
#48 Nora Lenderby on 05.20.23 at 4:15 pm
Try a Wetherspoons pub … different prices at different locations. As you would expect pricier in London but still cheaper than 604.
Enjoy …
“… oldest minted coin dates back to China around 640 BC”
Ancient Greeks made first coins.
All others quickly copy-pasted idea.
China started mastering that ability at that time.
And the stupidest comment award for 2023 goes to……
#29 the Jaguar.
“ Cash is also dirty. Too many germs. Ugh. Banks hate cash too. It might put Brinks out of business, but let’s toast cash. It’ so yesterday. Has ‘Boomer’ written all over it”
Question for you Jag: when are you packing and moving to China?
The elephant in the room “Ryan, great article.
You stopped short on the elephant in the room. There has been a loud and inconspicuous absence on this blog for a long time about Central Bank Digital Currency.”
It definitely looks like Canada and other countries will be launching their own digital currencies. This is consistent with my comments of how money is always changing. The key questions are how many digital coins will be created (ie a limited amount or will they just keep creating new ones like they do with paper money) and will these country digital currencies then usurp the current digital currencies like Bitcoin. – Ryan L
Money.
In modern civilization, it is the fuel that powers our lives.
Without it, we’re dead.
Or, at least, miserably struggling to stay alive.
A person without money is like a motor without fuel.
A boat anchor.
Whether that “fuel” be gasoline, diesel, electricity, wind, manpower or horsepower, or that money be cash, credits, ledger entries, bitcoin, scrip, or IOUs – we all NEED it to carry on.
Money sure makes the world go ’round.
I gotta git me some.
#91 Bitcoin Supremacist on 05.21.23 at 1:27 am
Not controlled by any central party, not prone to human corruption, not malleable by flaky governments with broken finances diluting their currencies to zero.
Xxxxxxx
And you can stick a fork in it. Seems rather prone to human intervention, next stop corruption.
#56 ogdoad
I’m not sure what you mean by ‘snuggles’ but there are a lot of smiles over here St. Louis ;)
Hey Garth, when you became finance minister, did the office provide you with any crash course/show you the ropes type of training? Or do they just plop you in an office? Just wondering what the process is/was and how our current minister might have been brought up to speed. Blog topic?
“Just since 2000 total global wealth has tripled to $463 trillion dollars. ”
No it hasn’t. Pumping up asset prices doesn’t increase real wealth. A house valued in 2000 at $200,000 and in 2023 at $2,000,000 is ultimately the same house, providing the same real value. Real wealth is derived from real investment, and if you look at those figures you will see real wealth has been growing much less quickly, and at a lower rate than historically.
Few seem to understand this point. Even our illustrious central bankers, who since Bernanke have been pursuing the so-called wealth-effect of pumping asset prices to the stratosphere in order to encourage people to spend. This is now de facto permanent central bank policy, which is why clear asset bubbles aren’t deflating. It also explains why real investment growth is so poor. After all, who wants to do the hard work of building actual things when you can just click the buy button in your brokerage account instead?
#96 We have a winner! on 05.21.23 at 7:01 am
And the stupidest comment award for 2023 goes to……
#29 the Jaguar.
Question for you Jag: when are you packing and moving to China?
—
More likely she packs her bags for Vladivostok. But, lets be honest, she probably hasn’t left the warm glow of her trusty Dell, Pentium III w/ 19″ CRT and 500mb of RAM since it was new.
88 Ponzius Pilatus on 05.21.23 at 12:56 am
59 Don Guillermo on 05.20.23 at 6:30 pm
56 ogdoad on 05.20.23 at 5:50 pm
Or, early indigenous cultures describing an entity that made white man want to kill just to gain these precious coins
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Interesting, I wonder what motivated the indigenous tribes to kill each other?
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And I wonder what motivates the Russians and the Ukrainians to kill each other?
It’s human nature.
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Winner, winner chicken dinner. You got the point!
Amazing that such a benign post such as #29 should get such a response. I wonder if Mr. Anslow’s colleagues know he posts this kind of drivel.
BTW, would I need to go as far as Vladivostok since I read the Rooskies took Bakhmut yesterday?
And now for the positive side of not being on the gold standard.
Countries print to support Ukraine.
Ukraine will liberate their territory as a result of the support.
This will result in a revolution in Russia, a democratic revolution. A few more independent Republics will emerge and eventually greater prosperity for all.
China won’t be happy but who cares about them, lying thieving CCP.
Netherlands and Denmark will buy F35’s and donate F-16’s to Ukraine. Win, win, I say.
Hopefully one day Ukraine will be able to afford their own F-35’s.
Good grief. You’ll be the first one crying when Trudeau raises your taxes .
Keep printing money,the financial industry has your back
#88 Ponzius Pilatus on 05.21.23 at 12:56 am
59 Don Guillermo on 05.20.23 at 6:30 pm
56 ogdoad on 05.20.23 at 5:50 pm
Or, early indigenous cultures describing an entity that made white man want to kill just to gain these precious coins
########
Interesting, I wonder what motivated the indigenous tribes to kill each other?
—————-
And I wonder what motivates the Russians and the Ukrainians to kill each other?
It’s human nature
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COMMENT:
Oh…..I think many of us know the answers.
The problem is parties like Faron will chime in with some kneejerk accusations.
By the way:
the total world debt is $305 trillion.
$45 trillion added during pandemic.
So out of this $463 total global wealth roughly 2/3 is DEBT!!!
Am I right?
Skipped over the most important aspect of this topic. Who owns the Central banks? That’s the real key. Mike Maloney in the “Hidden Secrets of Money” says it’s the commercial banks. Look it up.
Politicians make promises. Treasury Dept. issues bond. What’s the root word? Bondage. Banks bid on bonds, buy them with “currency” not money, sell them to the Central Bank. Central Bank creates currency out of nothing. Difference between $1 and $1 trillion? 12 keystrokes.
Of course inflation is baked into the system, that’s why we “need” immigration. That’s why economies have to keep growing. Debt never paid off. Keep growing….growing…growing…production…production…production….endless cycle til collapse. But the climate?
The general demise of actual cash money in people’s wallets really accelerated during Covid. There was a marked reluctance to take possibly germ laden bills into one’s hand at the till – I recall handing over actual bills to one cashier, who first extended her arm as far as she could before taking said bills into the very tips of her fingers. I’m sure bomb squads would defuse bombs with less caution than how she deposited said $ into the cash drawer. Then she sanitized her hands. Twice. The lesson being, please don’t use actual bills to pay for anything:)
“If you like robber barons, social decline and depressions, you will love the gold standard. – Garth”
With all due respect Garth we have that without the use of gold and silver as the official currency. Plenty of robber barons out there, social and moral decline and heresy and economic depression and decline in the birth rate thanks to real estate price and rent inflation and little or no real or nominal wage increases. Soon the ultimate immorality and degradation will be thrust upon society with CBDCs and social credit scores.
All of this is not progress, it is a regression to a new dark age.
Money are a mental image. And a social construct. It does not matter if they are paper, gold or silver, if there is no one willing to provide you goods and services for them they are useless.
Purchasing Power of the U.S. Dollar-CHART
I never thought I would see this chart here. This the inverse of US debt or money without a backbone….just PAPER!!!
That is why USA is doomed. Sooner or later printing presses will come to a stop just like KODAK film role factories!!!
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