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When the West attacked the rouble, Russia responded by demanding payment for its crude oil in roubles and by putting in place a procedure whereby buyers could readily obtain roubles in exchange for their currencies. In short order, the rouble not only recovered but increased in value beyond its standing when the attack took place. In comments under Andrew Gorybko’s posts on this website, I attempted to describe an international trading system for commodities that would bring the success achieved by Russia to the benefit of all the underdeveloped nations of the world who supply commodities to the rich. The system rests on the foundation of a currencies and commodities exchange market where commodities are priced in gold and paid for in the currencies of the producer nations. The system would create a demand for the currencies of underdeveloped nations; a demand that is sorely lacking today and is a major factor in their underdevelopment. It could eventually be applied more broadly to totally eliminate the use of an international reserve currency that unfairly favours the issuer of the reserve currency above all other nations.
The US is presently in process of losing its position as issuer of the reserve currency. The new issuer must have vast economic capacity and the military power to enforce its demands. China has the economic capacity but it is relying on Russia to provide the military might. If the Sino-Russian Detente proceeds along its present course, China will soon replace the US as world hegemon and the world will have lost an exceptional opportunity to put in place an international trading system consistent with a multipolar world order.
Russia, as the pre-eminent supplier of resources to the world has the most to gain by having a fair system for international trade in commodities. It is the natural ally of the underdeveloped resource rich nations. If Russia could gain the full support of those nations in its efforts to break free from US hegemony, then Russia could reduce its reliance on China and fully support Sergey Glasyev in his on-going efforts to implement a fair system for international trade.
There is a large community of individuals sincerely pushing the concept of a multipolar world order. They must be made aware that such order can only occur with appropriate reform of the international reserve currency system. This website with the assistance of Andrew could play a role in broadening understanding of the issues involved thereby helping to achieve a more just world order.
Noirette
I totally agree that all money is fiat money. All past attempts to base currencies on a defined quantity of gold or any other commodity have failed. The only place where exchange values can be realistically set is the place where exchanges occur, i.e., the market place. The broader the market place, the more efficient it will be in determining exchange values.
My proposal is to set up the broadest possible market where currencies, gold and other commodities are exchanged. In any market other than a strictly barter market, there must be (1) a unit of value for negotiating contracts and setting prices, (2)a unit of settlement for payments to vendors and (3)a unit of account for the transactions that have taken place. Currently, for international transactions, the US dollar is the unit of value, the unit of settlement and the unit of account. There is no special economic reason for the US dollar to perform these three functions. Mostly it is the historical result of the size of the US army and navy just as in the past the currencies of Britain, Spain and so on have performed those functions. The literature of economics and geopolitics has much to say about the problems that result from using national currencies to fulfill the three exchange functions; a particular concern being the excessive enrichment of the nation that issues the international reserve currency and the underdevelopment of the countries that supply that nation with commodities. In my proposal, the unit of value and account is distinct from the settlement unit. To result in fairness, the unit of settlement must be the currency of the nation of origin of the commodity. This leaves the problem of deciding what is to be the unit of value and account. Since the market I propose only deals in currencies and commodities and currencies have been eliminated from consideration, that leaves only a commodity or a blend of commodities. In my view a blend of commodities would be an artificial construct that would be difficult to use for negotiating and setting prices because of the difficulty in predicting the economic value of the resultant unit of value over time relative to the economic value of the commodity (or any other thing) you are selling. (Note that the unit of value being created is expected to have broad use in all international trading.) Eliminating currencies and a basket of commodities, that leaves only a single commodity as the basis for a unit of value and the best commodity for this purpose that I am aware of is gold.
Your comment implies that I am suggesting gold be accumulated by individuals to be used as a monetary unit. Not so. Gold is only a unit of value in the system I am proposing. All transactions are settled in fiat currencies. Gold is now held by individuals and nations because historically it has proved to be good store of value (when the cost of storage has not been taken into account). It is also held as a gamble that an international reserve currency tied to gold may be created which could raise the value of gold relative to the value of other currencies and commodities. My proposal actually eliminates the need for an international reserve currency. The system proposed does not require nations or individuals to accumulate gold. The normal demand for gold for jewelry and industrial and other purposes ensures a healthy market for gold provided governments do not impose restrictions on ownership or trading (as they have been prone to do in the past when currencies were tied to gold).
Your grandmother’s experience with the gold and diamond ring did not result from a lack a value but rather from a lack of access to a market. I expect that in today’s market you could buy quite a few loaves of bread from the sale of the ring (not that you would relinquish ownership of such a precious heirloom except under the most dire circumstances). Both gold and diamonds have great intrinsic value stemming from unique qualities that make them especially valuable for both jewelry and many industrial uses.
John
You absolutely need a named unit of either international currency as proposed by Glasyev or a unit of value, independent of any currency, as I am proposing. A unit of some sort is needed to anchor the system and to avoid undue complexity in pricing the cost of proposed production where inputs from different sources are priced in a multiple different units. A common unit of value is also needed as a unit of account for reporting on international trade and various other activities where analysts make financial comparisons between nations. Now such international reports are usually stated in US dollars. Reports providing comparisons over long periods are already often given in gold as there is no other unit of value that has a history extending thousands of years.Note that the science(?) of economy and the art of accounting also suffer greatly from the lack of a generally accepted standard unit of value and account that can be applied to all areas of economic activity involving exchange transaction.
I prefer my suggestion to Glazyev because a physical gold unit of value would likely be far more stable than a currency unit based on a mix of other currencies or mix of commodities. How do you do rational forward planning in a unit whose forward value depends on monetary policy decisions of a number of competing governments or on the myriad occurrences that can affect the pricing of a range of commodities? As to stability of national currencies, when I was a kid a quart of homo milk could be had for a dime, now a half quart is over a dollar. Over those 80-some years productivity of farms and dairies has greatly increased. As a value unit, that lying Canadian dollar is telling me that me that the economic worth of a quart of milk has gone up by a factor of 20. It just ain’t so.
Having its national currency as the international reserve currency is the centrepiece of the wealth pump that enables empires to bribe the elites of its vassal states and other resource providers and to maintain gigantic armies and carry on endless wars. Any talk of multi-polarity will remain just talk as long as there is not a global financial system that distributes financial clout in some more equitable manner. Glazyev understands the need but so far he has not been able to put forth an acceptable solution. See https://mronline.org/2023/03/15/sergey-glazyev-the-road-to-financial-multipolarity-will-be-long-and-rocky/ .
As stated in my comment at the end of Andrew’s previous post, a possible solution is to create a standard unit of value physically defined as one gram of gold of specified purity. This unit would be used in the negotiation and pricing of contracts for international sales. Settlement of amounts coming due under contracts would be made in local currencies. Conversion from the valuation unit to the settlement currency would be made at rates determined by a referent exchange market where currencies of the participating nations and gold and other commodities are traded. The stability of the unit of value would be enhanced if all major gold producers pledged to carry out all international sales of gold through the referent market. To assure an adequate exchange market for the currency of smaller nations, nations could agree that all contracts for the sale of commodities be settled in the currency of the vendor nation.
An international trading regime such as that outlined above could be introduced by the founding nations in stages to ease what would be a major disruptive effect to foreign trade. The problem is to get sufficient major trading nations actually committed to getting the ball rolling.
The two major nations pushing the notions of multi-polarity and dedollarization are China and Russia. The US is using its reserve currency status and resulting financial power to impede the economic development of these two nations so they are strongly incentivized to achieve dedollarization. But it is likely that dedollarization can be accomplished without putting into effect a financial system for international trade that is consistent with the principles of multi-polarity. If the US dollar system falls and there is no overall new system ready to replace it, the natural market place drive for efficiency will result in the international reserve currency gravitating to the currency of the new market leader. The yuan will replace the dollar and China will replace the US as financial hegemon. Similarly, if China becomes the financial hegemon, Russia, as a peerless provider of energy and other resources to China and to the rest of the world, is strongly positioned to share the benefits of China’s newly-gained financial power. This is not to say that China or Russia is acting in bad faith; it is just the natural outcome.
The nations that suffer most from a hegemonic financial system are those that are the providers of resources to the hegemon and are not economically strong enough to get special treatment. The best chance to put in place an international trade financial system that is consistent with the vision of a multi-polar world order is for the disadvantaged resource rich nations to take the initiative, hopefully led by Brazil and South Africa. But here again there is a problem. What is true for a nation is not necessarily true for all elements of society of a nation. It is the working poor who always bear the cost of financing the luxuries of the rich and powerful. Those who profited from collaborating with the old hegemon are powerfully incentivized to support the systems that keep them rich and powerful regardless of any change in hegemon.
Despite some success by nations in switching to use of local currencies in international trade, the US dollar continues to hold status as the world’s primary international reserve currency. A major impediment to the use of local currencies in international trade is the increased exchange rate risk that such use brings to contracts that extend over more than the briefest periods of time. One way to mitigate this risk would be to price contracts using a more stable standard unit of value while maintaining use of local currencies to settle amounts coming due pursuant to the contracts. The conversion from price in valuation units to price in local currency would be at exchange rates in effect at the date of payment thereby eliminating risk from exchange rate fluctuations. For example, a possible standard unit of value could be a Glint (G) defined as the value of one gram of gold of specified purity. Nations wishing to discontinue use of the US dollar in international trade would agree to price in Gs the goods and services they traded internationally. Increased rigour could be brought to such an arrangement by establishing a referent market where gold of the specified purity is freely traded in the currencies of the participating nations. This arrangement would take advantage of gold’s milleniums-long history as a stable store of value; and it would do so without incentivizing nations to distort the stability of the G unit of value by increasing their gold holdings.
Note that the general acceptance of a standard unit of value defined in purely physical terms could have far-reaching consequences in all areas of economic activity where exchange valuations are involved. Consider how the adoption of the metre as a standard unit of length resulted in the discontinuance or redefinition of literally thousands of measurement units of length, distance, depth, extent, area, volume, capacity, etc. thereby impacting virtually all areas of economic endeavour.
Despite some success by nations in switching to use of local currencies in international trade, the US dollar continues to hold status as the world’s primary international reserve currency. A major impediment to the use of local currencies in international trade is the increased exchange rate risk that such use brings to contracts that extend over more than the briefest periods of time. One way to mitigate this risk would be to price contracts using a more stable standard unit of value while maintaining use of local currencies to settle amounts coming due pursuant to the contracts. The conversion from price in valuation units to price in local currency would be at exchange rates in effect at the date of payment thereby eliminating risk from exchange rate fluctuations. For example, a possible standard unit of value could be a Glint (G) defined as the value of one gram of gold of specified purity. Nations wishing to discontinue use of the US dollar in international trade would agree to price in Gs the goods and services they traded internationally. Increased rigour could be brought to such an arrangement by establishing a referent market where gold of the specified purity is freely traded in the currencies of the participating nations. This arrangement would take advantage of gold’s milleniums-long history as a stable store of value; and it would do so without incentivizing nations to distort the stability of the G unit of value by increasing their gold holdings.
Note that the general acceptance of a standard unit of value defined in purely physical terms could have far-reaching consequences in all areas of economic activity where exchange valuations are involved. Consider how the adoption of the metre as a standard unit of length resulted in the discontinuance or redefinition of literally thousands of measurement units of length, distance, depth, extent, area, volume, capacity, etc. thereby impacting virtually all areas of economic endeavour.
Canadians. Those airhorns in Ottawa have become an urgent cry for help. The truckers are not fighting just Trudeau; they are fighting the WEF. The truckers cannot stop the WEF without support–lots of support. Be in one of a million vehicles headed to Ottawa. Make change happen. Now. While peaceful means can still prevail.
Spread this message.
Two competing energy transition strategies
Elites of China/Russia/Iran: fossil fuels—>nuclear fission—>nuclear fusion
Elites of the West: fossil fuels—>depopulation—>nuclear fusion
Jeff Bezos-Backed Company To Build Fusion Plant In UK
By Irina Slav – Jun 17, 2021, 10:30 AM CDTCanadian General Fusion, a company backed by Amazon, is set to build a demonstration nuclear fusion reactor in Oxfordshire, the BBC reports, adding the facility will be 70 percent the size of a commercial reactor.
The news comes a couple of weeks after the UK government said it would start work to create a regulatory framework for supporting research and development of nuclear fusion technology to enable the delivery of clean and safe energy.
Nuclear fusion has been garnering growing attention amid government efforts to pursue an energy transition away from fossil fuels and towards renewable sources of energy. To date, the biggest project aiming to recreate the process by which the Sun generates energy is ITER in France, which is planned to begin operation in 2035, after a series of delays.
Another, very different, fusion project is taking place in California. The researchers behind the General Atomics DIII-D National Fusion Facility recently published a paper suggesting a “compact nuclear fusion plant” concept can achieve 200 megawatts (MW) of net electricity after the energy cost of the fusion process through the use of relatively tiny, self-sustaining tokamaks powered by pressurized plasma, rather than the mega-tokamak of the ITER project.
In the UK, the Atomic Energy Authority is building the Spherical Tokamak for Energy Production (STEP), a prototype fusion power plant it plans to be operational by 2040. Last month, the AEA announced a breakthrough that would allow the components of the fusion reactor to last longer despite the intense heat produced during the fusion process, potentially bringing commercially viable fusion closer to reality.
China is also working on nuclear fusion. In May, researchers working on the country’s artificial sun project announced they had achieved plasma of 120 million degrees Celsius for close to two minutes. The duration of the successful experiment shows hope, but it also shows the long road nuclear fusion has yet to go to reach commercial viability.
By Irina Slav for Oilprice.com
Dr. John you are a phenomenon. The rest of us run our operating systems on carbos and fats. Please, please share your secret.
It seems probable that appropriate use of just aspirin, vit D3, HCQ, ivermectin and zinc tablets in prophylactic and early treatment could reduce the covid threat to a level we could live with and save hundreds of thousands of people from an untimely death in Europe and the Americas. But instead of protesting government failure to provide treatment, mass protests have been about masks and lockdowns. Then there is DBS including Chinese bio-warfare in his latest rant. The corporatocracy is evidently still firmly in control of the narrative, There is no need to rush your prepping.
Molecules of water are much smaller than the coronavirus. Take a common blue face mask such as Costco sells, form it into a cup and put it under a running tap. Guess what you will find–the mask holds water–it slows down those teeny tiny molecules to almost a full stop. Ilargi needs to do a little research on how particles or droplets get through a screening material and the various barrier effects caused by such things as turbulence and Brownian motion. For example, Brownian motion effects can result in smaller particles having a harder time getting through a barrier than particles or droplets of a larger size.
A woven cloth mask is much less effective than those blue face masks, but it will still stop the direct expulsion of water/mucous into your face by a person breathing, talking, singing, coughing, etc. within a few feet of you.
Remember a few years back when there was a lot of buzz on the net about sauerkraut eaters being less affected by whatever virus it was that was then making the rounds. How about all the kimchi eaters in Korea!!!!
Read the interview with a Russian virologist on the Saker’s website. Ignore the stuff about the virus taking a summer holiday but take the excellent advice on protecting yourself toward the end of the interview.
Hey Dr. Remember that report of the three crematoria in Wuhan burning out from overuse? The way things are progressing in Europe and North America we will soon find out whether our crematoria are of a more robust construction.
Latest numbers from Hubei are 16,678 confirmed nCoV cases and 479 deaths–a rate of 2.9%. So far the death rate is going down not up.
The CDC https://www.cdc.gov/flu/about/burden/preliminary-in-season-estimates.htm estimates that so far this season in the US there has been 180,000 to 310,000 flu hospitalizations resulting in 10,000 to 25,000 deaths. The lowest death rate per hospitalization that one can calculate from these numbers is one death for every 31 hospitalizations or 3.2%. From what information I can glean from the web, the number of nCoV cases that China is reporting as confirmed cases should correspond reasonably well to what CDC calls flu hospitalizations. According to the website https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6 , mainland China has 20,492 confirmed cases of nCoV that has resulted in 425 deaths for a death rate of 2.1%. Hubei province, which is the centre of the epidemic and accounts for 414 of the deaths, has a death rate of 3.1%. The rest of mainland China has had only 11 deaths for a death rate of 0.2%.
Death rates will likely change as more numbers come in but so far it looks like one has more to fear from the usual seasonal flu than from 2019 nCoV. On the other hand, China has implemented containment measures that are certain to have a very large negative effect on the economy. ?????
This study https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2374803/ seems to suggest that pretty near everything we are told about influenza and pandemics is made-up bullshit.
Dr. D “There is no “other” on planet earth, only “us”. ”
Seeking the best possible understanding of this statement– ethically, morally, scientifically, spiritually, etc.–should be a foundational aspect of all human endeavour. Also, a great slogan for sweatshirts, bumper-stickers, entry-ways, coffee mugs and so on.
zerosum
the story implies one can borrow oneself out of debt. rather than a tourist coming in, the motel owner goes to the bank and borrows the $100. then after the money cancels out all the debts and gets back to the motel owner, he goes to the bank and pays off his debt. oops–he still owes the interest . and that is how the rich got rich and why jesus had a problem with money lendersDr D There are some bright spots in the darkness that lies ahead. Many people are working hard to make a difference. See for example Living the Change free on Mercola through Mar ll, https://articles.mercola.com/sites/articles/archive/2019/03/09/living-the-change-documentary.aspx?utm_source=dnl&utm_medium=email&utm_content=art1&utm_campaign=20190309Z1_UCM&et_cid=DM272115&et_rid=563290438
“… the reality is, if one were to have a major contraction, much less plan a voluntary, intentional one, the pressure to stop it would be overwhelming and from every side: retail, political, financial, human, ecological, economic, military; there is no way such a plan could be seriously considered, much less implemented. WE ARE NEVER MOVING TO EFFICIENCY UNDER A DEBT-BASED MONETARY SYSTEM. End of story….
We not only need a New Green Deal, we need a New Deal altogether. A better one, a fairer one. A possible one. One with a future. So let’s start acting like it and begin.”
Looking forward to another post where you explain how to make the impossible possible.
‘There is simply no viable alternative to the dollar’s global role as a unit of account, a means of payment, a transactions currency and a store of value.’
Creating an alternative to the US dollar is not difficult but the consequences will be profound.
How to do it? — the same way that the dollar was created, i.e., out of thin air and trust.
For purposes of thin air – just pick a convenient number. Let’s say 1 trillion. Give the unit a name. I like trade reserve unit (TRU).
For trust you need an administrative body founded by treaty between participating nations with all nations having equal rights and responsibilities. Give the administrative body a name. I like TRU Registry and Clearinghouse (TRAC).
So far, we have TRAC sitting on 1 trillion TRUs. The purpose of the TRUs is to replace US dollars as a means of payment for international transactions. To accomplish their purposes, the TRUs must be allocated to nations on some objective basis related to their function. I propose that TRAC set up an account for every member of the United Nations and allocate the TRUs to those accounts in proportion to each nation’s share of global imports. Every nation on earth will then have a supply of TRUs waiting for them to use.
To get the process started it is necessary that a significant group of nations get together to found TRAC My preferred group would be the members of the Shanghai Cooperation Organization and its observer status nations.
Nations would get access to the reserves waiting for them in TRAC when then they become members by ratifying the TRAC treaty.
