SDR & the New Bretton Woods - Part Six

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Consolidation or Collapse, and Conspiracy Theories

In recent decades, emerging and developing economies have become bigger players in the global economy. However, their representation at the IMF has not kept pace with these changes. The G20 will continue to pursue reforms to the IMF during 2014 to ensure that country representation at the IMF better reflects the economic weight of its members. These changes will build greater confidence in the IMF’s ability to respond to global economic instability.”

                                                                                                                                                                                                         -  Statement on Reforming Global Institutions on the G20 Website

 There is a unique game of chess taking place on the global economic scene.  And like all good games of chess against worthwhile opponents it takes patience and calculation to strategize every move well in advance.  This particular game began in 2010 when the G20 countries all agreed to enact the International Monetary Fund’s Governance Reforms (or Code of Reforms) to change the quota amounts for member countries and restructure the Executive Board to more accurately reflect the changing dynamics of the world economy.

With the full implementation of these reforms we will see all the currencies of the world that are now pegged to the value of the U.S. dollar shift to a more balanced system of weight values and be pegged to the value of the SDR (Special Drawing Right) as issued by the International Monetary Fund.

The SDR was originally meant as a form of credit but since the collapse of 2008 has been slowly transitioning into a form of money, or currency.  Some of the reasons for the expanded use of the SDR can be found in sets of problems and remedies.  Which are:

Problems in the international monetary system:

  1. Persistent Global Imbalances
  2. Large and Volatile Capital Flows
  3. Unstable Exchange Rate Fluctuations Not Based on Fundamentals
  4. Insufficient Supply of Reliable Global Assets

Remedies for the international monetary system:

  1. Global Policy Collaboration and Stronger System Surveillance
  2. Enhanced Systemic Financial Safety Net
  3. Financial Deepening in Emerging Markets
  4. Development of New Reserve Assets

It’s the last item, development of new reserve assets, which we will focus on in this installment of the SDR and the New Bretton Woods series.

But first let us address the issue of corruption and rampant conspiracy theories which are overshadowing the real process and strategies which are taking place on the global scene.  Next week the 2014 G20 Summit is taking place in Australia.  Two of the many priorities for the G20 this year are anticorruption and reforming global institutions.

G20 Brisbane

The reforming of global institutions is a clear reference to the I.M.F. Code of Reforms which have been held up in the American Congress since 2010.  And we are seeing anticorruption tactics and procedures playing out every week as more and more government officials and top bank directors are being arrested or executed for fraud and crimes against the people.

The problems with the international monetary system as listed above create opportunities for corruption and for rent seeking elite groups to transfer wealth from the larger disorganized groups with no addition of new wealth to the system.  This has caused severe imbalances in the system and can no longer be allowed.

In “What Are Conspiracy Theories” we defined this rent seeking elite and described how one of the tools of the larger disorganized subordinate group (the middle and lower classes) to combat the smaller elite was referred to as “weapons of the weak”.

One of these weapons is gossip.  It is my proposition that conspiracy theories are in fact the unofficial and disorganized structure of this weapon of the weak.  When we are left with no official source of valid information in regards to what is happening in the financial world, we are prone to analyse and function on the lowest common denominator of information sources, which are conspiracy theories.

Some of the black and white or good guy and bad guy definitions of these conspiracy theories are laughable and do nothing but create confusion and misdirection away from a real understanding of the economic situation which the world faces in our modern era.

From mystical beings to secret informants, the ridicules angles and propositions run the gambit of the most profane amongst us.  Nowhere is the truth more hidden than in the midst of the absurd stories and so-called enlightenment of these secret sources and “top men”.  It is a system of maggots feeding on the hopes and dreams, not to mention confusion, of the large mass of disorganized subordinates.

True enlightenment comes from the realization that helping others is helping ourselves.  When you feed off others you are in fact feeding on your own life.  Whether intentional or not, this bottom feeding on each other only helps and encourages the small rent seeking elite to continue in its wealth transition from the masses to itself.

I will pay no further attention to the absurdities of the profane and absurd.  Good and evil exist in the minds and fairy tales of children.  And there they shall remain.

With that being said there is an organized structure or process attempting to bring rule of law and a balanced system to the international monetary system.  This system of change is based on the fundamentals of self-limiting rent seeking elites from large transfers of wealth which only serve to deepen economic recession.  We are seeing this system of self-limiting being successfully implemented in countries such as Vietnam, China, Russia, and India, with more to come.  It is not a perfect process but it is a process nonetheless.

Self Limiting Rent Seeking

This is not China against America.  Or some shadowy group against another shadowy group.  All the information about this new system is already out in the open and available for all who take an interest in learning about it.

Zhou Xiaochuan of the People’s Bank of China is one of the most vocal members of the international community calling for the implementation of this new SDR system.  And a big part of the structure of this new system is the Basel 3 regulations as put forth by the Bank for International Settlements.  So it’s no surprise to learn that Zhou Xiaochuan is in fact one of the board members of the Bank for International Settlements.  This should put to rest any conspiracy theories about China overthrowing the current banking system.

When we hear talk of the Global Currency Reset and the Great Consolidation, what we are reading or hearing is in fact a simplified version of the modifications being slowly implemented in the international monetary system.  Though they will in fact benefit greatly from the consolidation and composition process by way of increased physical assets.

As we have covered in previous essays, the Great Consolidation will be the restructuring of sovereign debt into the new SDR system of compositions and allocations.  Considering that commodities will make up a large percentage of the SDR compositions, it’s important to manage this sovereign debt as the debt itself will eventually, and in essence already is, undermining the commodity prices which will build a basket of goods used to value the SDR’s themselves.

What we’re saying here is that if there is no Great Consolidation (restructuring of sovereign debt through the I.M.F.) than there will be no Global Currency Reset or SDR basket of currencies based on goods and other commodities.

With the new SDR system in place, all the currencies of the world can peg their value to the SDR containing the basket of commodities and other composition weights which we have discussed. With the SDR acting as the reserve currency anchor a fixed exchange rate can be set (or allowed to fluctuate within a band) and the foreign reserves held in dollars will be slowly replaced with SDR reserves.

With a large scale substitution of U.S. dollar reserves with SDR reserves, it will create a situation where less exchange rate pressure is exerted on the U.S. dollar as it attempts to restructure its sovereign debt through the very same SDR consolidation system.

So why hasn’t the Global Currency Reset and Great Consolidation taken place yet?  Simple, the United States Congress has not passed the legislation required to restructure the Executive Board of the International Monetary Fund.  For those who doubt that this is indeed the holdup, a very brief review of the 2010 Code of Reforms themselves should be required.  The U.S. holds 17% of the vote on the Executive Board.  For any measures to pass the required vote is 85%.  The U.S. can veto any resolution or policy change as it sees fit.  It is holding off on restructuring the board and in turn the international monetary system as referenced by the G20 above, as a form of chess game in which it is seeking additional allocations and compositions for the dollars’ value and placement within the system once said system is fully implemented.

Now that Congress has given a blank cheque debt limit increase, the money should be available for increased deficit spending which will increase the U.S. quota injections into the I.M.F. This will allow for the sovereign debt restructuring to begin.

Another probable explanation for the refusal of the Congress to enact the legislation is the likelihood of the exchange rate risk associated with the transition from dollar liabilities to SDR liabilities.  This risk could be captured in a temporary substitution account which would be setup as a form of safety net for the dollars collapse.  Perhaps the United States is negotiating a shared risk instead of sole responsibility for maintaining the dollars SDR composition value on the substitution account as the transition from dollar reserves to SDR reserves takes place.

It is well known by all sides that the dollar cannot collapse without causing the collapse of the new SDR system before it is even fully implemented.  The I.M.F. and the U.S. both require this substitution account as a temporary transition point to ensure there is no sudden drop in demand for dollars.  The transition has to be slow and orderly.

The substitution account will further allow for the direct foreign exchange market intervention for SDR’s which will enhance the attractiveness of the SDR compositions and allocations as laid forth in the capital asset reserve structure of the Basel 3 Regulations.

As foreign exchange in the SDR system increases, account balancing and clearing can be completed by the Bank for International Settlements.  The BIS has already developed a multi-tiered system for clearing and settlement of SDR payments.

Thus we come full circle back to the statements made by Zhou Xiaochuan of the People’s Bank of China, (who just so happens to be one of the most influential economic figures in the world) calling for the SDR system.  And remember, he is a board member of the Bank for International Settlements as well.

Zhou Xiaochuan

If China gets its way and overall economic growth is added to the weights of SDR compositions, which could in fact be used as a method of shared risk within the temporary substitution account, than we will see the SDR system implemented without further delay.

Once all the world’s currencies are pegged to SDR’s and not dollars than we will see a form of global trade which will not only encourage, but also enforce a method of real effective exchange rate stability based on real economic values.  This is where currencies like the Vietnamese dong will be revalued and become a stable form of wealth storage for the people.  See “Why the Vietnamese Dong Will Reset”.

A complete peg to the SDR will promote global trade by removing exchange rate fluctuations and will in essence act as a simulacra of the gold settlement system.  A de facto gold standard.

Let’s us go back to the beginning of this essay and think in term of the chess game again.  The complexity of this SDR system is not easily understood or explained.  It will be sold to the public at large as an extension of what is happening already.  In previous essays we have thought in terms of micro and macro patterns.  Let us do so again, as we consider that the Quantitative Easing through the Federal Reserve will slowly transition into SDR Quantitative Easing through the International Monetary Fund and accounts balanced through the Bank for International Settlements.

As the Fed tapers QE we can expect that it will mean an increase in SDR QE through the I.M.F.  In time this will become more obvious.

Full implementation of the Basel 3 Regulations through the Bank for International Settlements have been extended to 2018.  One can only wonder if this has to be a direct cause and effect to the delay in the 2010 I.M.F. Code of Reforms.

The Basel 3 Regulations are meant to strengthen bank capital requirements by increasing liquidity and decreasing bank leverage.  This increase in capital requirements are broken into two categories:

  1. Tier One Capital – must be common shares and retained earnings.
  2. Tier Two Capital – Supplementary but Harmonised Capital:
    1. Undisclosed Reserves
    2. Revaluation Reserves
    3. General Provisions
    4. Hybrid Instruments
    5. Subordinated Term Debt

It is the Revaluation Reserves that interest us in regards to our essays on SDR composition and allocation.  When foreign exchange reserves are revalued to match the level of economic output and commodity basket or composition of the SDR’s, the banks themselves that hold these foreign reserves will see an upward revaluation of their Tier Two Capital requirements under the Basel 3 Regulations which are meant to support the I.M.F. 2010 Code of Reforms and consolidation of sovereign debt, which will come about when the Executive Board of the I.M.F. is restructured to reflect the economic realities of the emerging markets.

This is the Global Currency Reset and Great Consolidation.  Please refer back to Part Three for a full explanation of the problem/reaction/solution Hegelian Dialectic which is being purposefully played out in the system which we are attempting to explain here.  The process is confusing and convoluted.  Is there any wonder that there are rampant conspiracy theories about it?  You just need to remember that this is a game of chess and not checkers.  The development of new reserve assets takes place through the SDR system or we are likely to face further sovereign debt problems and untethered currency fluctuations.  Its consolidation or collapse, not conspiracy theories.  - JC

SDR's and the New Bretton Woods - Part One

SDR's and the New Bretton Woods - Part Two

SDR's and the New Bretton Woods - Part Three

SDR's and the New Bretton Woods - Part Four

SDR's and the New Bretton Woods - Part Five

33 Comments on “SDR & the New Bretton Woods - Part Six”

  1. JC, thanks for your essays, which are amazingly clear for such a complex subject. Who are you and what is your background that gives such breadth and depth to these matters. There is nothing on your blog site and nothing on the web about you, so I assume "JC Collins" is a pen name. It would help us all ferret out the substance from the myriad opinions floating in cyberspace. Thanks.

  2. The G-20 is trying to supplant the World Bank and IMF in distributing the world's wealth in the Global Debt Facility, cloaked in secrecy by the banking cartel identified by Stefania Vitali, James B. Glattfelder, and Stefano Battiston: “The network of global corporate control“, ETH Zurich, published September 2011
    http://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v2.pdf

    That cartel has been overthrown by a coalition working for the rule of law, as predicted by the ‘power transition model’ cited in footnotes 7,8 and 10 of http://www.larsschall.com/2013/05/08/governance-issues-at-the-world-bank-a-security-risk-to-the-world-order/

    Here is an exerpt from Jacek Kugler, Ron Tammen and Brian Efird: “The War Presidency: Options Taken and Lost”, International Studies Association Meetings, Montreal, Canada, published February 2004, http://citation.allacademic.com//meta/p_mla_apa_research_citation/0/7/4/2/7/pages74272/p74272-1.php:
    “Specifically, a gap between the United States and Germany, the leader of Europe now and into the foreseeable future, generates frictions and dissatisfaction within the Western alliance. This dissatisfaction in turn, raises the potential of a challenge between the US and an emerging giant in Asia. Contrast this structure with the alternative that was emerging after the war in Afghanistan. A German – led EU was coordinating anti-terrorist efforts with the US. Russia, France and Japan seemed to be participating in an expanded NATO/EU/Atlantic Alliance. China was now neutral. Given this structure the potential challenge from a dissatisfied Asian power could be delayed until the end of this century.”

    Here is an exerpt from Randolph M. Silverson, “The Contributions of International Politics Research to Policy”, Political Science and Politics, published March 2000, https://www.apsanet.org/imgtest/ContributionsInternationalPolitics-Siverson.pdf See page 62

    “[T]he forecasts produced by [the model] were shown to be both more specific and more accurate than the results generated by the Directorate of Intelligence…[A]nalysts…have a tendency to look to the future as a projection of the past, while [the model], to the contrary, begins with the assumption that policies are the product of changing political forces that are estimable…[I]t may be noted that it generates forecasts about policy outcomes using information on how stakeholders (i.e., those with both an interest in an issue and an ability to affect its outcome) are positioned on an issue, how important the issue is to them, and how much power each stakeholder has. ..How does the model fare? Quite well, in fact. ..[T]he model was used “to analyze scores of policy issues in over 30 countries” (275). …[T]he model’s rate of accuracy was about 90%, and when the forecasts of the model and CIA analysts differed, the model’s forecast was correct in every case.

    A member of the US' Armed forces has this to say about what is really going on in the military: "[A] concealed foreign enemy and its American minions are on their last legs because...it has two fatal vulnerabilities: its needs for: (i) public invisibility and, (ii) control of the U.S. military to enforce its concealed global schemes...The enemy's critically important control of the U.S. military is rapidly evaporating. The American, Russian, and Chinese militaries--in concert--have determined the wisdom of bringing to an end the plans for fomenting a World War III and its New World Order pretensions and its murderous existence. Closing with the enemy has already begun.

    Foreword: https://s3.amazonaws.com/khudes/A+Grandfather%27s+Encouragement.pdf
    Here is the rest of the book:
    https://s3.amazonaws.com/khudes/1.Perspective+Summary.pdf
    https://s3.amazonaws.com/khudes/2.Perspective.pdf
    https://s3.amazonaws.com/khudes/3.Perspective+Afterword.pdf
    https://s3.amazonaws.com/khudes/4.Rebuilding+America%27s+Inner+Compass.pdf
    https://s3.amazonaws.com/khudes/5.Rebuilding+Global+Banking+System.pdf

    And they waited for Maj. General Michael Carey to make sure that a nuclear bomb detonated in the ocean instead of on Charleston on October 8, 2013 before firing him for what happened the previous summer? http://beforeitsnews.com/banksters/2013/11/us-allies-do-some-stocktaking-and-we-will-help-patriots-2433698.html

    1. Ladies and Gentlemen,
      Finally, tonight we come to our Feature Event, to determine the future prosperity and freedoms of the entire world.

      In this corner, Mr. JC Collins, brilliant author and suspiciously-insightful, probable double-agent for the world's dark, underworld banking cabal, representing SDR's and world resource and currency controls.

      And in this corner, Ms. K. Hudes, slightly-kooky brilliant ideologue, backed by 150,700 tonnes of solid gold, and the remaining unpurged US Military, representing prosperity and freedom.

      We want a good, clean fight: the lives and deaths of many millions may be in your hands.

      DING DING!!

  3. Your readers need to decide whether your epithets are applicable. In any event, there are some others in my corner, including the authorized signatory on the Global Debt Facility, who has allocated 170,500 metric tonnes of gold to underpin the uncut US Treasury dollars printed by John F. Kennedy before his death. https://s3.amazonaws.com/khudes/UBS+UNCUT.pdf
    See my comment in http://www.bloomberg.com/news/2014-02-18/lew-says-emerging-markets-china-risks-cloud-economic-outlook.html

    1. Bullion was FIXED and pegged when Kennedy signed Executive order 11110. I'm wondering what problems we would have run into had the FIXED peg endeared itself to the American people and world economy, short term ? Could the severance of the peg in 71 have come off as it did ? Fixed gold (any bullion) cannot work long term. The trade value had to be set free for gold to be re-monetized with market scalable liquidity where weight is the the unit of account.

      You cannot pour new wine into old wineskins.

  4. SDR's, another scheme of the secret Cabal! Release the gold to humanity of each nations illegally sequestered by the cabal bankers, and peg each nation's currency from there. Why is that so difficult for people running these institutions to understand and implement? They wanted the gold to disappear so they can ultimately hijack it while continuing to maintain their power and influence in the monetary system. When nations have the same footing as everyone else, there is no one to control, no one to bully, no one to coerce to sell and give up their resources for just pennies on the dollar. Release humanity's gold to each nations according to their share, that's what needs to be done. Hell with your SDRs, we don't want that!

      1. For me the challenge wasn't caring to understand how it works, I had that in spades but finding a reliable place to learn it was the biggest challenge for me.

        I followed a few misleading paths prior to finding yours JC, and to date yours has been the most truthful and most enriching place I have found to sit and learn.

        Thank you for caring JC.

    1. I'm a gold guy who sees that the distribution system had to go through a maturation process via the real-time (floating) value by way of USD/oz. The rest is really up to the market for the sake of re-monetizing bullion as a debt-free currency with fully scalable liquidity. We are in a real-time environment and cannot allow either side of this monetary yin-yang crash, bullion or fiat currency. Rate of change is critical.

    2. Why peg (fix) at all ? Let gold do what it should. Govern by natural law.... in real-time. Leave fiat as is. Destroy nothing. Debt currency represents the completion of the dark side (debt) of a very necessary "Liquidity Yin-Yang". The marketplace is charged with the fulfillment of the LAW in this case, the fulfillment being the completion of the asset side of this model. Just add assets and stir gently ! Could it be much simpler considering that the addition of assets (L2) to existing debt based liquidity (L1) will allow L1 to be reduced and leave circulation ?

      The above cannot be done top-down. It must be an organic function of the marketplace. No crashes please !

      Don't overlook or undervalue the order of creation. Is it not light that comes out of the darkness ?

      You cannot pour new wine into old wineskins.

  5. For 81 years Washington DC has been the Military capital of the ROME- London- Washington trinity.to the exception of all others.

    Everything globally is run by a finite interlocking set of corporate board of directors that set the agenda, and here in the USA buy the myopic 435 US House members that are maintained a s a permanent rubber stamp for war every two years. Since 1788 the first proposed amendment to the Constitution to create a formula for enlargement of the house every ten years has been left undone.

    Until we here in a sovereign USA return to a US House composed of representatives in the proportion of say 1 per 200k rather than the present 1 per 750k now for the House, we may never expect a House to be trusted to protect a system of money and banking again until we have a chance with local state control as it was without the unchecked Federal reserve manipulation of currency as it did in taking 1/3 of the liquidity out of the Clearing House banks in 1929 to prevent withdrawal of cash for payment of the margin calls.

    WE absolutely do not need the national military government we have crushing us locally - the regulation is monstrous. The US Treasury has the power to right regulations that would guarantee rule of law; but to do that the Treasury Secretary must work for rule of law not the select interest of the Pilgrim Society plutocrat freeloaders that have run the Fed since 1913. The US Senate approves the appointment of the US Treasury secretary or any other appointment; however, the US Senate since the 17th Amendment is owned by ultramontane cartel coalition NOT the elected State Legislatures and rule of law. .WE here in the USA must get rid of the 12th and 17th Amendments to have any chance for the return of a reasoned US Senate to protect elected State self interest again.

    Since 1933 we here in the USA have had a military government under a Executive Order 2040 created Congress that otherwise could order the printing of commodity backed US Treasury Notes rather than Federal Reserve notes without having to pay interest anymore. I object to the interest being paid on FRN. That could be changed overnight by Congress and the Treasury Secretary who writes the rules for the Fed.

    I understand the rational for SDRs and what BRICS is doing is out of necessity in the right direction; but I like the majority of private citizens of the USA am not going to tolerate the loss of our national sovereignty in the process, with some green eye-shade bean counter sitting in Switzerland telling us what to do. The EU fourth Reich be damned!

    1. Chris ... I'm a gold guy and I hear you but gold does not work as a currency when the value is fixed. Gold could only be re-monetized in real-time (floating value) after the FIXED peg was severed to set bullion value free. It was about gold all along , IMO. The dollar is simply a real-time measure for gold weighted settlement within a new paradigm of debt-free currency circulation. I suppose you could look at debt-currency as part of the process to arrive at real-time bullion-as-currency. The floating dollar and its debt-based accompaniment was a "necessary evil" in the process.

      You cannot pour new wine into old wineskins so I guess it's good that forgiveness frames this passing age, huh ? Peace to you.

  6. heads up JC.. "Michael Noonan" is plagiarizing your work. The following paragraph can be found smack bang in the middle of one of his pieces:

    "Zhou Xiaochuan of the People’s Bank of China is one of the most vocal members of the international community calling for the implementation of this new SDR system. And a big part of the structure of this new system is the Basel 3 regulations as put forth by the Bank for International Settlements. So it’s no surprise to learn that Zhou Xiaochuan is in fact one of the board members of the Bank for International Settlements. This should put to rest any conspiracy theories about China overthrowing the current banking system."

    http://www.marketoracle.co.uk/Article48419.html
    http://news.goldseek.com/GoldSeek/1417446060.php

    1. He said, she said , aside, I think it's time to stop playing financial musical chairs and financial musical chairs is all that can be accomplished within elite circles. The formation of the debt side of a liquidity yin-yang is pretty much complete. Don't you think it's time for the marketplace to fulfill the Law by creating the second half (light side) by using debt-free assets ? We seem to have these incredibly insane conversations about liquidity as if debt is the only choice available for the purpose of providing liquidity. Old habits ?

      1. It's a double edged sword Michael. It's those debt assets which created enough liquidity to allow the industrial revolution to happen. It's not a coincidence that modernization and industrialization began after the implementation of the current banking system. The debt based money creation system is faulted, but are you prepared to live in a world with no growth and development?

        1. JC ... It's not faulted. It's incomplete. It is light that emerges from darkness. In the order and process of creating a liquidity yin-yang, the formation of the free floating dollar was an inescapable and necessary step in achieving a free floating contrast for bullion. Bullion could never be re-introduced as a currency with scale (with weight as unit of account) unless the liquidity could be varied on the basis of market driven pricing and trade value, preferably in real-time. It is only now that real-time gold-as-currency (weight based) can float that it can be used to inflate the asset side of the fore mentioned yin-yang of liquidity.

          Call it monetary osmosis.

          If you ever though of the FED as being secretive or deceptive, it's very possible that you had no idea how right you are. 😉 The dollar may not be a great currency but it's a wonderful real-time measure for gold.

          You cannot pour new wine into old wineskins.

  7. apologies for butting in, but respectfully JC, i would argue that the premise of growth & development being wholly dependent upon a debt-based monetary system is a false one. heck, kickstarter alone is a proof of concept to the contrary.

    sure, the quantity of both might decrease, even substantially, but perhaps it's just time for growth & development to focus on quality over quantity?

    1. I would retort that thousands of years of history supports the premise of up and down growth spurts which had led to no real long term gains in growth and development. Until the Industrial Revolution of course. Even the Agricultural Revolution, from the early years BC, was held back by lack of liquidity. The only logical explanation for why the Industrial Revolution happened when it did, in the region of the world that it did, was because of the expanded access to capital to fund it. The modern banking system began in the same region of the world where the Industrial Revolution started. Now modernization has spread to the rest of the world which is why we require a multilateral system. The depreciation inherent in a gold standard monetary system, and all other systems that came before it, are the main cause of lack of growth, hence, no Industrial Revolution. You can toss all sorts of gold metrics this and commodity metrics that, but at the end of the day, or age, growth requires something other than the bare essentials of survival, which is manifested in the wealth potential of modern economics, with economics being the obvious extension of our survival instinct. The challenge is to develop a method of naturally (not equally) distributing wealth and preventing the rent-seeking elite (which is recycled over multiple generations) from using ideological principles to consolidate that wealth at the top. There can never be the sameness paradise that people dream of. There will always be differences. As such, no system of equal distribution will ever work.

      1. au contraire mon ami, the position from the argument is made does not (a) favor the return of a gold or similar standard, (b) envision an eventual equal distribution of wealth or other grand utopia, nor (c) ignore the massive technological strides that were made during the industrial revolution due to the fuel provided by a debt-based monetary system with associated compounded interest attached.

        if anything, it simply questions (1) whether this debt-based monetary system (the Rule of 72 is still a rule regardless of the unit of account) is a predominant, if not the largest single, driver towards the consolidation of capital into the hands of the rent-seeking elite. (2) whether the hunger for yield that exists under the current system creates perverse incentives that both creates exponential future consequences and stifles the potential innovation, imagination & ingenuity latent in a broad cross-section of the global populace due the information explosion of the last 2 decades. and (3) why it does not honestly recognize & reflect the source of where & how all of this magical credit appears in the first place.

        i wholeheartedly agree that all human-created systems are corruptible and, in due time, will be corrupted due to the corruptible nature of humans. however, that should not be an argument against the experimentation of new systems and for a continuation & centralization of the status quo (whether or not it's dressed up as "multilateral"). if further centralization MUST occur to prevent global chaos, there should be an opportunity for an equal counterbalance of decentralization beyond a movement beyond the dominance of a single nation state controlling the reserve currency.

        i can accept that we as a race perhaps aren't quite there yet, but i also submit that a large reason for that is due to the design of the system in which we use to trade with (the predominant source of our interactions with each other), a system in which a vast majority of the species has absolutely no say with regards to its construction.

        1. You are simply restating the argument I've been making on this site for over a year. The only thing I'd add is that the vast majority of the species does not want to make those important decisions, which is why the smaller segment of the population will always make it for them. There will always be leaders and followers, masters and slaves, winners and losers. I'm bored with this exchange. Please don't respond.

    2. JC ... History didn't have the modern luxury of real-time applications. The economy is a real-time event. Liquidity system should dove-tail in harmony.

      Perhaps this parable will help ? I created it about 3 years ago.

      In 1971, the very desirable real-time genie was loosened from its bottle. Unfortunately, the evil debt genie was loosened from the same bottle at the same time. The irony is that the real-time genie holds the only key on how to get the debt genie back into the bottle and seal it up. Give thanks for the age of information.

      1. And yet "real-time applications" and the "age of information" are products of modernization. The same modernization which started with the Industrial Revolution. So we needed the debt based money creation system to modernize, but now that we are modernized, we no longer require that system of accessible liquidity? I would argue that this line of reasoning is fraught with undefinable challenges.

    1. Yes, I did read your post, and it made no sense in the context of the conversation we're having. "It is light that comes out of darkness, not the other away around..." Esoterically light and darkness are both extensions of each other. So is the yin and yang you are referencing. Separation is only the illusion of space.

  8. Just add assets and stir gently ... that's all we need now. That cannot be an elite undertaking however. It cannot be by proclamation, by fiat or official policy. It must be a market undertaking in order to preserve the yin (debt) side of the creation. No crashes please !

    The yin-yang becomes symbiotic but this cannot be seen from a dark side perception. Step into the light, sir.

    1. Your statements are contradictory as symbiosis cannot be fragmented into divisions, as at that point symbiosis would not exist. "Step into the light , sir." I suggest you read further material on the site, especially the posts under the Esoteric tab. You are not speaking from a full position of confidence.

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