Lately when my curiosity overwhelms my better judgement and I turn up the volume while watching the ticker at the bottom of the screen on CNBC, all I hear is denial of what I see as obvious facts.
I suppose when peoples' very financial existence entirely depends on them ignoring some uncomfortable fact staring them right in the face, they will ignore that fact as a matter of survival. So it is on CNBC with the real inflation rate and the debt problem, and I guess it will stay that way until the US dollar is knocked from its throne as the reserve currency. At that point the rest of the world will no longer let the US get away with their self-serving selective blindness.
The problem with finding another reserve currency is that as bad as the US dollar is, economies underlying every other major currency are worse, think Japan with the Yen with unbelievable levels of debt which can't possibly be serviced if rates rise much above zero, think soon to freeze over rock solid Europe with its Euro which is only functioning due to massive printing and near zero rates, think China with its Yuan where the economy is a giant Ponzi real estate scheme which will come crashing down if they don't continuously mint new suckers to buy. The dollar is simply the cleanest dirty shirt in the laundry which we are forced to wear yet again for another day.
One possible stop gap solution might be a multi-metal & materials backed up hard currency. Russia is currently trying to pull off a limited form of this with the Ruble by requiring oil and gas purchases to be made only in Rubles. If they are cut off from Swift system for much longer, they will probably expand this requirement to other materials sourced there which the world cannot do without such as nickel and titanium making the Ruble the first hard asset backed major currency in a while. The Ruble is not a reasonable solution since it has too small of a float, and Russia has manged to isolate itself from the financial structure of most of the western world since it's currently lead by an international pariah.
In the very long run the only solution that I can see to control governments' tendency to inflate their currencies into worthlessness is a currency based on block chain technology with carefully limited supply such as Bitcoin but designed to avoid the massive energy consumption required to mine coins. I just don't think most of the world's population is quite technologically savvy enough yet to accept one's and zero's only in their wallets, maybe someday, but long after I'm reduced to pushing up daisies, or ashes, depending on whether my widow will want to spring for the price of a burial plot. I've told her that I don't mind one way or the other. My only funeral requests are that she not wear a red dress and that she doesn't bring a date to the service.
Regards,
Douglas
Edited by Douglas, 18 September 2022 - 03:14 AM.
