100 元
(That's 100 RMB, or 100 yuan, if you prefer)
Great Recession? Come on, a little honesty in labelling, please. The Greater Depression, at least. Or, if we don't get off our arses soonish, The New Dark Ages, perhaps.
In 2008 I asked if any of you would care to guess the date of the demise of the US dollar. I put 100 RMB on 15 August 2011. That bet ( Read more... )
Great Recession? Come on, a little honesty in labelling, please. The Greater Depression, at least. Or, if we don't get off our arses soonish, The New Dark Ages, perhaps.
In 2008 I asked if any of you would care to guess the date of the demise of the US dollar. I put 100 RMB on 15 August 2011. That bet ( Read more... )
I am of the opinion that the US is not in an economic depression
Hmm. Their GDP is increasing, certainly. Neglecting, for the time being, the arcane methods by which this number is generated, let's consider that most of the growth in this number is attributed to the financial sector. Given the manner in which those bandits conduct business, I feel drawn to ask, is there actually any product there? That is, do their activities produce any goods or services which the holders of all that US currency might value? Or do their current profit margins and unprecedented reserve deposits indicate nothing more than their skill at theft?
A depression consists of more than a particular set of KPI's. It's in the condition of the population, surely? If we're looking for numbers to describe that, how about the eighth of US citizens on food stamps. Let's ask them about a recovery. They're on the territory, not the map. The future of US economic growth is in prison labour, munitions and mercenaries.
Now productivity is of course different
That's up everywhere, too, apparently. More profits out of less wages, at any rate. But to drag the concept uncouthly back to the real world again, productivity's made in China.
China is the world's biggest creditor state and the US is the world's biggest debtor state
On this much, we can concur. Do you envision this state of affairs continuing indefinitely?
buying up gold by the yokels is just going to make the problem worse
I don't know how much spare cash yokels have compared to central banks, which are the main buyers of gold of late. Might flight to gold be a symptom of the problem, rather than a cause? Gold doesn't look like it's in a bubble - it's tracking other essential commodities like food and energy. It's all the world's currencies that are sliding. What we're experiencing is global-scale systemic theft.
Do I think this means the US dollar is going to cease to exist?
Now hang on, I never said the US dollar would cease to exist. Even Zimbabwe's currency still exists. In fact, since they started printing those 100 billion notes, there's more of it about than ever. The US dollar's demise would be as a reserve currency and useful store of value.
No. Put me down as a nay-sayer.
Okay. As we're the only two in so far, we can negotiate on terms if you like. For instance, if you want to run it out to 2020, it might be preferable to make the ante an ounce of silver, running around $40 Aus these days. Also, instead of the subjective date I suggested, we could choose a more concrete mark, such as the day the value of the yuan exceeds the dollar's.
my reading of strangedave's deflation
There are various ways to measure inflation/deflation. At one end there's the size of the money supply. At the other there's purchasing power. Somewhere in between is what currencies trade for on the (I won't say open) market. By any of these measures, your reading of strangedave would seem to be that by deflation he means inflation, and by inflation, presumably, he'd mean deflation. Does that make sense? About as much as an economist.
In any case, this all sidesteps the gist of my post, which is that inflation/deflation and the other statistics are largely bullshit. The "problem" is the ruthless movement of capital by a tiny class that have left nation states behind, and seceded from the human race.
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The gains in the financial sector are due to large-scale pillaging of public treasuries.
The Fed's "Quantitative Easing" (read "money printing") policy, while doing little for the US economy but stave off the inevitable, is producing "hot money flows" overseas, fuelling asset bubbles in these other economies (eg: real estate speculation in China), which is why China is complaining about American dollars increasing market volatility worldwide. This is the beginning of a trade war.
Anyway, I'm not sure if you got the chance to read my reply past the first paragraph, but we should at least fix the terms of the wager:
1. Amount, could be in RMB (100 yuan = $15 atm) or silver (currently $40/oz, would hold value thru hyperinflation).
2. Winning criterion, since you seem leery of a subjective turning point, we could set a concrete measure, such as the crossing of a particular RMB/US$ exchange rate.
The purpose of my original post was not to utter prophecies, but to provoke discussion about our world's near future. To your credit, you're the only one who responded - I'm finding the average person's willingness to do so is inversely proportional to their stake in the current system. I'm still intrigued, though, to hear how you believe the US Empire could sustain itself, or how the population will, without major upheaval, defend itself against the presently overwhelmingly successful corporate barons.
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I'd be leery of that as well, as it is trivial to say that the RMB will improve over the US dollar in coming years, especially given the relative value of the two countries in terms of foreign exchange reserves and public debt.
The United States is in decline; and China is on the ascendancy. To claim that about the 21st century economics is not hard. The more important question is political; how totalitarian will the United States become and how democratic will China become during this transition?
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Me too. A crash of the world's reserve currency will entail a dive in all currencies. The exchange rates will be chaotic, and not much of an indicator, I agree. I'm just interested to find what you would define as the end of the US dollar as a major force in the economy. The yuan is a fifteenth of a dollar - if that ratio were reversed, the world would have to change quite a bit, no?
The United States is in decline; and China is on the ascendancy
That's one way of describing it. Another would be that one host is being drained of it's last few drops, and the next host is being acquired. Some diehard oligarchs (eg: the PNAC cabal) refuse to believe that it's time to move house, and may be dropped. Some Chinese/Russian/Indian oligarchs will be added, as the price of admission to new markets. This makes scant difference to the 99%.
My point is not only about the overall movement of capital, which is obvious. Rupert Murdoch's already got himself a Chinese wife. I'm also wanting to discuss the manner in which this transfer is being engineered. The herd is being led to a stampede over a cliff, when they could have been allowed to find their way to the valley by less steep paths. A gradual decay is being concentrated into a crisis.
how totalitarian will the United States become and how democratic will China
"Democracy", as I see it being used to label various real-world regimes, is a schtick. This is how it works: first they give us soap, then a second set of clothes, then a soft bed, followed by a fridge, a TV, a car and so on. The bootheel is taken off ever so gradually, just enough to buy our docility. Even at best, though, we never gain a substantial proportion of our own production, and in the meantime our masters get our labour and taxes (without having to pay for guards - efficient, from the plutocrat's POV). We also acquire more and more debt. When we can't believably take on any more, we have been used up, and off to debtor's prison we go.
"Totalitarianism" labels the action of power when it's time to push people in that opposite direction, put the bootheel back on. As Chomsky pointed out in Year 501, the US has always been totalitarian from the standpoint of other nations and its own poor. And, as Assange has being saying lately, "democracies" can allow freedom because there the power has been largely fiscalised, and so out of most people's reach. Totalitarianism is required only where people's words and actions might actually have some effect.
So I'd say that China will come to be labelled a beacon of democracy, while Americans are scheduled to become the 21st century's Nazis. For all the fucking difference it makes to we peasants. US growth industries: prison labour, munitions and mercenaries. Chinese growth industries: anti-depressants, cosmetic surgery and sitcoms about middle-class Chinese families living in atypically large houses. Over time, the action of corporations will exert a homogenising influence; every place will have its first-world gated enclaves and third-world favelas. Jakarta if we behave, Johannesburg if we don't.
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Assuming that currency holders don't exchange their US dollars into other currency.
I'm just interested to find what you would define as the end of the US dollar as a major force in the economy.
I wouldn't use that metric; I'd use gross production as the indicator of whether an economy is major or not.
So I'd say that China will come to be labelled a beacon of democracy, while Americans are scheduled to become the 21st century's Nazis. For all the fucking difference it makes to we peasants.
In makes a huge difference. Pax Americana, for all its wrongs, is vastly preferably to the current Pax Sino. For starters you and I can have this conversation without being shot...
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What? You're still thinking as if the current system is going to continue somehow. The value of those other currencies is, in part, based on investments denominated in US dollars. All currencies will slide (although not as rapidly as the dollar, for all that matters). As everyone tries to dump currencies of any kind in preference to real world assets, there'll be a burst of global hyperinflation. We're talking an upheaval of the international money system bigger than Bretton Woods. Goodbye sovereignty, hello one world currency.
I'd use gross production as the indicator
Therein lies the rub, eh? How to value production (among other things). I see the economy as the net manifestation of all our value systems. While we continue to be selfish bastards, we doom ourselves to slavery.
By your continuing evasiveness, I take it you're not really inclined to commit to a wager then?
In makes a huge difference. Pax Americana, for all its wrongs, is vastly preferably to the current Pax Sino. For starters you and I can have this conversation without being shot...
There's so much to object to in that statement, I scarcely know where to begin. I'll restrict myself, on this occasion, to pointing out that debating whether China or America is the more benevolent hegemon supports the idea that this is a conflict of nations. I repeat, China isn't winning this thing, the corporations are. This is the end of the era of nation states.
Populations are being played against each other. As systems crash and austerity bites, as people get angry and look for someone to blame, we'll be told that China is at fault, and the Chinese will be told that Westerners are. The world's being manoeuvred into a war to reduce, break up and privatise national armed forces. Oh, and to concentrate wealth, like any war.
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Yes, I think the currency system will continue. The unspecified "real world assets" will continue to be measured in currency values.
By your continuing evasiveness, I take it you're not really inclined to commit to a wager then?
I am unsure of what conditions you are placing. The demise of the US dollar, whatever that means?
I'll restrict myself, on this occasion, to pointing out that debating whether China or America is the more benevolent hegemon supports the idea that this is a conflict of nations.
Despite the somewhat overstated claim of the death of the nation state and the rise of the multinationals laws are still applied by the State, over certain geographic boundaries, where they operate with a monopoly on violence. This is something which no anarchist should forget.
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I said the current system will suffer a discontinuity. Of course there will be currency afterward, but, like the euro, no nation will have sovereign control of it.
The unspecified "real world assets" will continue to be measured in currency values.
And the unspecified "currency values" will continue to be measured in real world assets. Chicken or egg.
From our end, money is about purchasing power, it's equivalence to actual things. From the top, though, money is a fiction, an elaborate esoteric game of influence, a con designed to get us to sign bits of paper that say we agree to give up the products of our labour for less than they're worth. Money used in this way is an impersonal slavery, which will only end when we declare their bits of paper null and void.
I am unsure of what conditions you are placing.
I imagined I was attempting to negotiate mutually acceptable conditions. Oh well, let's just leave it.
The demise of the US dollar, whatever that means?
We'll know it when we see it, I guess. A period of hyperinflation, unprecedented in it's scope. Global shock therapy. War. UN reformation. A new world reserve currency. Serfdom. Well, that's the plan at least, I'd say. But I've faith that people will not necessarily behave according to plan.
How do you imagine the world's economy unfolding?
Despite the somewhat overstated claim of the death of the nation state and the rise of the multinationals
Ah, as to level of over or understatement, time will tell us that. I'll point to the Copenhagen summit and, closer to home, the toppling of our prime minister by mining barons, as but two of many indicators that the process is already well under way.
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No single state then...
We'll know it when we see it, I guess. A period of hyperinflation, unprecedented in it's scope.
I'd be happy to bet $10,000 AUD that doesn't happen in the next five years.
Given that the precedent is 207% per day (July 1946, Hungary) I am fairly confident of such a wager.
How do you imagine the world's economy unfolding?
Slow growth spurred by technology with occasional disruptions caused by estate bubbles.
I'll point to the Copenhagen summit and, closer to home, the toppling of our prime minister by mining barons, as but two of many indicators that the process is already well under way.
The first which showed the strength of the geographic state which prevented an international agreement and the strength of a local ruling class in the latter.
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If by "state" we refer to an entity that represents the interests of a nation's entire population, then no state or group of states will control it. If we refer instead to a façade designed to give legitimacy to a privately owned central bank, then sure, a group of states will control the currency.
Given that the precedent is 207% per day (July 1946, Hungary) I am fairly confident of such a wager.
Hmm, I'll assume that I didn't express myself clearly here. By choosing the word "scope" rather than "size", "amount" or "magnitude", I was hoping to convey that the hyperinflation would cover a larger geographic area than previous episodes, affect more people and more currencies. It will not be anywhere near the largest in magnitude or duration. Of course, it'll be hard to measure in the usual way, against the cross-rates, since all currencies will be affected at once, but in terms of commodities, there'll be a sharp drop in purchasing power. Say, 500% to 1500% inflation in 6 months, so nowhere near your Hungarian example, or any of the others on Wikipedia's top-6 list. Still, no picnic. Even after the speculative spike clears, your $10k probably won't get you as much as an ounce of gold.
It's the cost to the world of admitting that US dollars will never return the value we currently say they will. The cost will be paid disproportionately. While the 99% will face spiralling interest, or decimated savings, the 1% have already been busy converting their loot into actual things, like farmland. They'll never allow real wages back up to where they were. And they'll take the opportunity to replace social security with various forms of insurance and credit. Peonage or starve.
Slow growth spurred by technology with occasional disruptions caused by estate bubbles.
Ah, so more of the same then? Time will tell.
What is meant by economic growth, when it's accompanied by declining wages and conditions, increasing hours and stress?
The first which showed the strength of the geographic state which prevented an international agreement
Or, as I would put it, Copenhagen showed the weakness of geographic states which were unable to obtain an agreement (or even reasonable discussion), despite a clear mandate from their populations. The preferred plan of the monied interests is that carbon emissions should reduce at about the same rate that fossil fuel production is predicted to fall, which doesn't really require an agreement to be reached.
Which nation states are weaker? The little ones that lack the strength to fight the oligarchs, or the big ones who work for the oligarchs?
and the strength of a local ruling class in the latter.
So you're agreeing with me here then? Rudd's ouster demonstrates that the mining barons and other billionaire bastards are our rulers, and parliament is a puppet show.
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But once upon a time, they were applied by a king, weren't they? Same thing really, gangsters running a protection racket. The law has never been applied equally. What matters is who's applying it to whom.
As transportation and information technology progressed, wealth moved from the land-holders to the merchants, who enlisted the help of the masses with a pleasing freedom and equality schtick, in order to take over the racket.
We've still got a few constitutional monarchs hanging around, though. By analogy, nations won't suddenly cease to exist either - they're becoming subcontracted states. As corporations grow, the notion of popular mandate can be dispensed with. The monopoly on violence is outsourced.
So when we're arrested by a security guard at the shopping centre we live in, we'll be handed over to police that are just another security company, who'll dump us in a likewise privatised prison, to be used as cheap labour. As for "law", the golden rule. All in all, not fundamentally different from the present - a matter of degree really.
Oligarchs are bound together by the common cause of bringing everybody else under their dominion. It's when they finally get a lock on the population, and own pretty much everything, that they turn on each other. The transition from republic to empire to feudalism.
Neofeudalism differs somewhat from older feudal eras. Let's consider the catholic church: a power structure that occupied mental real-estate as well as physical, and so able to exist concurrently with competing power structures, mingling and co-opting. Corporations have taken on this property too, with further advances, such as the ability to quickly mutate their hierarchies in modular fashion. While the landscape becomes an endless patchwork of corporate jurisdictions, perhaps similar in size to medieval fiefdoms, these enclaves are intertwined in global gangs, like many overlapping churches.
Vestigial states and laws will remain as masks for necessary coercions, the maintenance of the corporate playing field. What'll make it feudal is the way they'll greedily compete for a larger share of the slaves.
What gives me hope is that many will fall through the gaps, and here we might co-operate to claim some freedom. We've done it many times before, but somehow always seem to end up back where we started. The adaptation we need to break out of the loop is: How do we resist gangsters without becoming gangsters? Even then, the job's never done - freedom is prone to entropy like any living thing.
This is something which no anarchist should forget.
Anarchists should do or shouldn't do,
an anarch simply does or doesn't.
Methodology before ideology, I say.
How about we don't forget the serfs this time?
Let's not leave any power structures standing.
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