With thanks to Jorge Vilches, our writer.

what is money ?

“Accumulated labor acknowledged by third parties” is my unique never-ever-published definition of real money, thus holding effective economic value as tangible wealth. I also maintain that any other definition of money – and trust me there are many – does not work out well something which is easy to prove beginning with what we all suffer today.

Only after 5 very long decades the world has now finally understood that real money cannot possibly be an abused and failing US credit instrument of sorts – definitely not fit for purpose — as it has become today with complicit impunity So the international community now realizes that the US has an unproductive, highly-troubled and terminally-indebted economy that has succeeded – so far — in tricking the world to accept US dollars as real money (not). Today´s US dollars have no link or relation to anything, be it labor parameters, commodities, real estate, gold, water, or Christmas. Just lots of leadership ´capture´, an excellent printing press (or electronic equivalent), and US imposition supported directly or indirectly by 790+ military bases and the world´s largest — by very far — defense budget. So the BRICS+ ever-growing economies have had enough and are now sick and tired fully fed up with such nonsense already. Got it?

The BRICS+ have already overtaken the G7 in global GDP and sum up very close to 50% of the world´s population.

digging & re-filling 24/7

Digging ditches all day long and filling them up again during night-time exactly as they were would certainly mean debt owed to the sweating workers. And true enough it would also mean “accumulated labor” of course — possibly lots of it — depending upon the number of times that such futile exercise was carried out. But it would definitely not ever be acknowledged by third parties because the end result is not remotely productive or desired by anyone. It´d be ground-up soil just as flat as it was the day before. So tiresome and sterile ditch digging + subsequent re-filling with no further improvement would certainly mean debt accrued by sweaty shovelers but an end product not duly acknowledged by third parties. Dollars now are also becoming debt not duly acknowledged by third parties simply because they are useless for everything that the USA no longer manufactures or renders services for (more on that later) which is lots.

you work, we print

So DE-dollarization implies getting rid of growingly use-less debt instruments (US dollars) which are not real money and are ever more not acknowledged by third parties outside the US for transactions amongst themselves of products and services that they do manufacture and/or render. Furthermore, be advised that dollars in and of themselves have no (zero) intrinsic value. So US dollars — in the long run only good for buying products or services eventually Made in USA – would gradually not be able to pay for stuff or services made elsewhere per the required design, technology, quality, price and support service. Furthermore, thru heavenly powers supposedly derived from a carefully edited and personalized Book of Revelations, the G7 countries now feel entitled to intervene or plain seize anybody´s property anytime anywhere. You just work tons and they just print and own you per their own discretionary and changing rules. So new sources of non-dollar financing are emerging with bilateral agreements to trade and lend in currencies other than thru risky dollar accounts and banks. The BRICS group of countries keep growing their non-dollar transactions.

Ref #1 : https://www.rt.com/business/575849-dedollarization-us-oil-trade/

Re f#2: https://oilprice.com/Latest-Energy-News/World-News/Pakistan-Wants-To-Pay-In-Chinese-Yuan-For-Russias-Crude-Oil.html

something for nothing

Dollars are just failing I.O.U´s (more on that later) issued by the US which until today were still exchangeable for (1) goods and/or (2) services and/or (3) payment of debts the three of which could be either of US origin (that´s okay) or also from elsewhere (that´s NOT okay). In a nutshell, that´s what the current DE-dollarization process is all about, which translated means that US dollars will progressively be dumped onto the US economy´s front lawn as time goes by leading to an unstoppable hyperinflationary process. So, as we speak, many commercially and industrially, and technologically important economies (actually essential for the world and individual countries) have decided that transactions amongst themselves should be paid for in something different from US dollars as the USA is not involved in any part of such process. Why would Argentina or Brazil export their grains to China payable in US dollars rather than Yuans while both need tons of Yuans to pay for Chinese imports? Accordingly, Saudis now allow China to pay for their oil in Yuans. So with growing impetus, many countries are now paying – and planning to pay in increasing quantities — for transactions amongst themselves with their own currencies and/or physical gold bullion which thru 6000 years of history has clearly proved that it has long-lasting intrinsic value in and of itself as accumulated labor duly acknowledged by third parties. So bullion´s role would be to compensate for the differences in the exchanging BRICS+ currencies used to settle import-export balances between non-US trading partners. BTW, the Central Bank of China does not waste any time reducing its exposure to US Treasuries now lowest since early 2010 and getting lower by the hour. Since 2018 Russia holds practically 0 (zero) US Treasuries. Ref #3: https://www.reuters.com/world/china/argentina-govt-pay-chinese-imports-yuan-rather-than-dollars-2023-04-26/ Ref #4: https://www.rt.com/business/575723-argentina-brazil-dollar-trade/

_{Reuters / Refinity Datastream / Richard Leong}

the US deal

This is happening now because the USA today no longer manufactures and/or renders anywhere remotely near enough products or services to cancel the humongous amount of IOU dollars already issued with total impunity. An “exorbitant privilege“ per former French President Valery Giscard d’Estaing´s brilliant definition many decades ago. The US deal is “you work hard as hell and we´ll just print” follow? You raise cattle till cows are fat and healthy enough to export us your beef – meaning years of investments and hard labor – and we´ll just copy-paste some more pretty Benjamins and hand them over to you in exchange, okay? Please be advised in case you didn´t notice that Walmart today does not carry “Made in USA” goods because everything now is most efficiently manufactured somewhere else.

Prof. Michael Hudson defines in his now famous book Killing The Host” that … the financial system expands faster than its productive economy thus overburdening it with debt… so crises grow increasingly severe… and economies are torn apart by breaks in the chain of payments…” MH further explains that the problem is trying to pay debt beyond the ability to earn the dollars in which such debt is denominated. Please be advised that, per Bloomberg, the US now spends more on servicing its debt than on the military despite having the world´s far largest defense budget by a longshot.

This covert “currency default system” during the past 500 years of Western colonialism has meant unlimited wars.

Ref #5: https://michael-hudson.com/2023/05/krugman-clings-to-currency-tropes/

Bloomberg graph

risky dollars

“Customers from (now bankrupt) Silicon Valley Bank – Cayman Islands branch have had their funds seized by the FDIC”. So the message to foreigners is simple: only US depositors are FDIC-covered. So think! who´d be next?

But US Treasury Secretary Janet Yellen does not agree: “The US is the very bedrock of the global financial system… The world has never doubted that America will pay the principal and interest on its bonds, in full and on time…” Then add the many quadrillions of the derivatives time bomb and beware we´d get what Berkshire Hathaway´s CEO Warren Buffett a.k.a. “the Omaha Oracle” has defined as ´financial weapons of mass destruction´ aimed directly at the West.

Venezuela now also pledges to drop the US dollar. Ref #6: https://watcher.guru/news/venezuela-ditches-us-dollar-president-maduro-says

Ref #7: https://www.wsj.com/articles/the-pain-of-silicon-valley-banks-collapse-is-being-felt-by-these-depositors-f18c0bd4?mod=hp_lead_pos5

Ref #8: https://mishtalk.com/economics/dollar-weaponization-expands-fdic-message-to-foreign-depositors-is-dont-trust-the-us

Ref #9: https://sputnikglobe.com/20230513/china-sells-us-debt-stockpiles-gold-amid-de-dollarization-trend-1110316383.html

Ref #10: https://www.rt.com/business/576397-us-debt-default-worldwide-panic/

the real “day of infamy”

But it didn´t use to be this way before August 15, 1971 – the real FDR “day of infamy” — the date on which President Richard M. Nixon unilaterally abandoned the Bretton Woods Agreement whereby the dollar was directly linked to physical gold at the established rate of $ 35 per ounce troy per “ the dollar-exchange standard”. By the way, please be advised that the Federal Reserve is as “Federal” as Federal Express and has never ever had any reserves (zero).

The US government policies and the US Fed ´notes´ performing as fiat ( please read: ´government-imposed´ ) currency (not real money) have led to extraordinary and unsustainable levels of dollar savings worldwide ready to be unleashed onto the US economy without mercy as lots of foreign and local holders decide to reduce their dollar exposure possibly joined by US savers also aware of the above. Very succinctly that is DE-dollarization, a huge problem caused by the USA´s own doings, the now arch-famous “greening of America” so that the dirty hard work

is done elsewhere while Americans enjoy life as their Anglo-centric ´exceptionalistic´ values call for.

China now drinks the G7++ golden milkshake

As of Monday, May 8^th, 2023, the commercial banks in China have opened the electronic Renminbi gold window whereby regular savings accounts are connected directly to gold accounts. This means that many hundreds of million Chinese citizens can now buy gold directly at their banks with the click of a mouse thus avoiding dealers. So the world will now witness even faster drainage and direct suction of imported Western gold that will never ever leave China. The bottom line is that — as of right now — the Chinese are going to drink the West´s golden milkshake while the US Fed keeps peddling new financial artifacts in its failed attempts to save the US dollar from the fiat currency cemetery.

Ref #11 : https://www.zerohedge.com/news/2023-05-10/drainage-chinas-new-gold-wallet-may-suck-western-gold-dry

( authored by Goldfix and edited by Zero Hedge )

money makes the world go around

That is, real money makes the world go round, not “non-money” as we all now have. “Give me control of a nation’s money and I care not who makes its laws” is a quote financial historians attribute to Mayer Amschel Bauer Rothschild. The problem for the world economy right now is that, by their own wrongdoings, G7 central banks have lost such control the instant that the US Fed invented – and all G7 central banks allowed for – the current un-backed “non-money” we all have, I kid you not. So it has been a genuine financial experiment now coming to an end after 50 years of deceitful gimmicks or just plain cheating. Beware, fiat government-imposed legal tender currencies do not extinguish debt. This means that humongous DEBT is alive, kicking and multiplying obscenely all around us as we speak. And the more fiat “legal tender currency” that is printed (read many trillions of QE) the larger the DEBT that is floated onto the world economy. Today’s “funny money” of sorts or legal tender Mickey Mouse currencies are mere units of account + means of payment but without any store of (intrinsic) value as they should, otherwise they are not real “money”.

Ref #12 : https://www.counterpunch.org/2015/11/25/too-big-for-fed-have-central-banks-lost-control/

“ Since the beginning of this century, again and again, and again the central bankers have failed miserably with nothing to show besides 14th.century printing-press technology… massive unemployment, massive defaults both public and private, massive emigration flows …and many wars with more to come.” – J.V. November 2015

“The sums in play are so staggering that even the Fed won´t be able to stop the meltdown…” – Charles Hugh Smith

Ref #13: http://charleshughsmith.blogspot.com.ar/2015/11/is-this-how-next-global-financial.html

Ref #14: https://thesaker.is/western-currencies-will-fail/

one trick ponies

Which brings us back to the problem of central banks now having lost control. J.P. Morgan brilliantly left on record a hundred years ago that the problem is that “Only gold is money, all the rest is credit”… So in the best of cases, fiat non-money would just be credit as billions of humans in their lifetimes have already lived through more than one fiat legal tender currency in their own native nation-state. For example, Argentina experienced 5 (five) such fiat legal tender currencies in the past 50 years and is now ready for Number 6. US Federal Reserve Chairman Ben Bernanke (author of “The Courage to Act”) summed it up short & sweet to the US Congress on 11/21/2002 “…The US Government has a technology called a printing press (or, today, its electronic equivalent) that allows it to produce as many dollars as it wishes at essentially no cost…Under a paper-money system, governments can always generate higher spending and, hence, positive inflation. …”

So there you have it, directly from the horse´s mouth.