A brief history of money.

A BRIEF HISTORY OF MONEY

Money, we are all familiar with it, most want more, some to the point of  excess. It has been described as the, "Root of all Evil".  Realistically, we do need a certain amount, but I would like to talk about a simple brief history of Money.

Originally, most financial transactions were a form of barter,"I'll trade you a goat for that woven shirt that one of your wives made". Or,"I am tired of goats, how about we trade for some of your sheep". This all worked out well and good, but eventually someone got the bright idea of converting wealth to some form of exchange.

There is some record of salt being a form of exchange, or round stones with holes,  but most items were quick to lose their value when someone either found a pit with enough salt to flood the market or a method to mass produce stones with holes.

Eventually they settled on gold and silver as a form of money. Early records show that, as early as 2150 BC, the Shekel and Talent were used in the middle east, These were measures of weight,  A shekel was .36 of a troy weight oz. A Talent was equal to 60 manehs and 3000 shekels. This standard of weight was used by Egypt, Babylon, Phoenicia, Greece, Persia etc.  The ratio was 15 shekel's of silver = 1 shekel of gold.  Everyone had a balance scale to do business.

Finally, as governments grew and became more sophisticated, the minting of money began. This consisted of coins which were of a standardized weight, usually embossed with the image of  the King or individual in power at the time. It made trade much simpler and  must have caused a recession in the scale business.

As is usually the case, it did allow for some skulduggery, clipping and shaving of coins was known to happen. Then Kings sometimes made the coins smaller with the same designation. This may have been the first form of Government endorsed inflation.  "Honey, were did we put that old scale?"

Interestingly, the size and weight of coins varied over the years, but the ratio of gold to silver was fairly constant from 500 BC up to the 20th Century.

Biblical  times-  12-1             Rome          12-1         Europe     0-1492        10-1

Early Greece      13-1             Early Japan  8-1                          1492-1834   15-1

Alexander          10-1             Early China  12-1        England                       16-1

The United States settled on the ratio of 15-1  The Constitution stated that all money was to be gold or silver coin.

O course, we have been talking about gold and silver coins. What about paper money?

In medieval Europe, gold and silver was the medium of exchange. When someone had a little more than needed for survival, they often placed it with a Goldsmith, who had a natural need for security in his business.  He would account for their items and give them a receipt.  The Rothschild's started out this way.  Humans sometimes being a little lazy, and not too careful about things, began to exchange the receipts for other goods and services and leave the gold with the goldsmith.  Goldsmiths, who were a little sharper than the average person of the day, soon realized that his receipts were as good as gold, and no one knew how much gold he really had stored for people. He was able to purchase Real-Estate, finance explorers to the new world and many other endeavors with his own receipts that did not represent gold in his possession. I could expound forever about how they used this power, but I will resist.

There were many known instances were these early bankers got a little too greedy, rumors circulated  that there was more receipts than gold, and a run for their gold started.  When they could not produce the gold,  he might have been found hanging somewhere.

Remember, Politicians and Governments always take note of a good idea to increase their power and wealth.

Early paper money was a receipt for a weight of gold or silver, In the USA. a silver dollar was .7734 troy oz. of silver.  20 silver dollars could be exchanged for 1 Oz. troy of gold, a $20 gold piece. This was a ratio of 15-1. I personally remember silver certificates, which were supposed to be redeemable for 1 silver dollar. Up to 1934 you could exchange a $20 bill for a $20 gold coin. The US dollar had the reputation of being, "as good as gold". The gold-silver ratio today is 72-1.

In 1914, with passage of the Federal Reserve Act,  money no longer represented an asset, but would now represent Government debt. A promise to repay by the government.

In 1934, President Franklin Roosevelt, by executive order, ordered all citizens to turn in their Gold Coins in exchange for paper $20.00 bills. Private possession, or exchange of gold was outlawed. When the government decided they had confiscated all the gold they were going to get, they raised the price of gold to $35.00 oz., this was used for trade between countries. Those wonderful paper dollars they exchanged with the citizenry just became worth 43% less than the gold coins they exchanged.  Citizens were threatened with $10,000 fines and 10 years in jail for not cooperating.  Gold ownership was again legalized in December of 1974.

Silver still circulated as coins till 1964,  when they were replaced by alloys with no intrinsic value.

So now all money that exists, has  no intrinsic value, but only the confidence that someone else will exchange goods and services for it. While there are many instances in modern history where that confidence evaporated, so far most people are still willing to accept modern currency.

Currency itself is now in the process of being replaced with electronic currency, Bitcoin, Debit and Credit cards etc.. Endless possibilities, that will make the ancient clippers, shavers and dishonest goldsmiths envious.

originally published Oct. 12, 2015

It appears we are now coming to the end of fiat currency era, that is currency without any real built in value. What will replace it is yet to be seen. Big government would of course love to have currency that is just a digital entry, that they could manipulate, block, or devalue with a click of a computer. It seems some of the world is exploring another option that would be some form of real money. There is one of those age old truths that good money will always drive out bad money. That is true as long as there is an option of good money available. I expect we will seeing the new options in the near future. 
5/8/23

We now see the plan to introduce a central bank digital currency. Indeed, a monetary unit without any intrinsic value, unable to be held personally. It will allow governments to view every transaction, determine what transactions should be allowed, confiscate all wealth with the click of a computer key and in effect give government ultimate power over the people. It will be the end of all freedom of choice in a free market. It will give government the ability to tax, inflate, confiscate and dictate what can and cannot be traded. It will create all kinds of methods to avoid this trap and will be accompanied with the penalties to enforce that this is the only alternative money.

8/24/23

We can expect the unsustainable debt and deficits of the United States, accompanied by the desire of other countries to flee the use of the dollar, to reach a crisis in the near future. It is very likely that it will soon be clear that this debt will no longer find those willing to risk this haven for their real money. We can expect schemes to rescue this situation with possibly forced investment by IRA and 401's into U.S. debt or a sudden crisis followed by the end of this current fiat money system. We expect the cure to be total control of all assets.

5/3/2024

The EU is pushing to get its CBDC launched this year. As the debt situation in most of the western world is escalating many predict some sort of reset of the financial system. It will most likely be preceded by a debt crisis and then the roll out of the promised solution.

9/27/2024

We now see flight from U.S. bonds from countries around the world. It seems that interest rates are now possibly needed to rise to sell this debt. Those liquidating U.S. debt seem to be buying Monetary metal. The answer to shoring up the U.S. dollar and debt market is a balanced budget. With a $2 trillion deficit either raising taxes or cutting spending will cause a economic recession at best.

1/14/25

The purpose of this article is to hope to make people aware of what money is supposed to be. A store of value, an asset, not an instrument of manipulation by governments. 

3/17/2025

The tragedy of the Ukraine project.

 DOES UKRIANE HAVE A FUTURE?

SAD RESULTS OF FOREIGN INTERVENTION

It is estimated that Ukraine had a population of over 50 million in 1991 when they gained independence from the Soviet Union. The country has had a tumultuous political environment ever since that time. Todays population is now estimated at 26 million. Some of this decline is attributed to the population that is now in those areas controlled by Russia. 

Much of the discord has emanated from the fact that the eastern part of the country is primarily a Russian population, which has had close economic and cultural ties to Russia, the western parts have aspired to join the EU. In previous elections, the eastern population voted overwhelmingly for Viktor Yanukovych. In 2004 the election was close and Yanukovych edged out Yushchenko by a slight margin. The election was disputed and unrest followed with eastern oblasts threatening to secede if the election was overturned. A new election took place in 2005 with Yushchenko winning in a close race. 

In 2010 Yanukovych won 48.9 to 45.4 with overwhelming support in the eastern oblasts. After both these elections there was big increase in lawfare attempting to neutralize opposition leaders. Ukraine extended the lease with Russia for the Sevastopol navel base in Crimea until 2042 in exchange for low priced natural gas.

In 2013 a vote to begin integration into the EU was postponed and led to increased political demonstrations. Russia did not necessarily oppose Ukraine joining the EU, but a stipulation of the EU was that Ukraine would no longer be allowed commerce with the Russian federation. This was not acceptable to the eastern oblasts of the country. There was also speeches by western leaders claiming Ukraine would also be a new NATO member, this was clearly opposed by Russia.

In 2014 the crisis grew, with US. politicians like John McCain and Lindsey Graham speaking to the crowds encouraging them to change their government. Victoria Nuland admitted funneling $5 billion to opposition groups.  Eventually Yanukovych fled the country. This led to the secession of Donbas and Luhansk oblasts and the occupation of Crimea and a referendum that voted 95% to join the Russian federation. It also brought about attempts of the Ukraine government to outlaw all things Russian, from former monuments, to even speaking or teaching in Russian.

This began the conflict between Ukraine and the 2 oblasts that resulted in over 14,000 deaths over the next 8 years. There were several attempts at mediation that really were just window-dressing for preparing Ukraine for war with Russia. This came to a head when Zelensky, who won his election by promising to make peace with Russia, voiced and began moving troops to the east to exert dominion over the 2 breakaway oblasts and Crimea. This was countered by the Russian invasion into Ukraine in February 2022.

It is now almost 2026 and the war continues, It is reported that Ukraine has near 2 mullion soldiers killed. This would also translate to 2 million disabled due to this conflict. There are at least 7 million who have left the country, 1.3 million to Russia, 1.2 million to Germany and over 1 million to Poland, the rest dispersed around the world, mostly women and children. Men between 23 and 60 are forbidden to legally leave. Many younger men have also sought to leave the country.

Civilian casualties are estimated at 49,000 with 13,800 killed. It is most likely most of these are in the eastern part of the country. Many of the eastern cities have been leveled, although far eastern cities like Mariupol are being quickly rebuilt. 

Life goes on pretty much unaffected in the western part as primarily military resources are targeted, but daily life is interrupted by air raid sirens.

The east is the industrial and resource area of Ukraine, much of it part of the defense apparatus of the former Soviet Union and also the Russian federation. The loss of this region will have lasting economic consequences and every day Ukraine becomes a little smaller. 

It is likely that many of the educated and skilled who have found jobs and a new life elsewhere will not return. The country is now dependent on the west for financial support to keep the government going and estimated $5 billion a month. It may take many years for the country to recover economically. The eastern part will be rebuilt by Russia, but the infrastructure in the west will be a drain on the west to assist in rebuilding.

So far, Russia has avoided taking out the bridge infrastructure and the historic cities in Ukraine. The sooner the end comes to this conflict, the sooner Ukraine can attempt to be a viable country in the future. It may never be able to reach the potential that it had before the interference from outside in what was a internal political dispute.

The demonization dog and pony show.

 JUSTIFYING ACTION ON VENEZUELA

THREAT, PLUNDER OR JUST NEEDING A WIN

We are now witnessing the parade of talking heads, demonizing everything Venezuela and it leader Maduro. It is reminiscent of the same tactics we have witnessed many time over the last few decades. From Cuba, Iran, Iraq, Syria, Russia, Libya and now Venezuela. All the reasons to justify a military attack and a hoped for regime change operation. In every instance that this has been perpetuated, it has ended in disaster for the people of those countries, even while claiming victory.  

Are the people better off in Iraq, Syria and Libya? Has the U.S. national security actually been preserved and enhanced? Is Ukraine now in better place than before the U.S. funded and aided revolution in 2014? Is Russia now weaker and less of a challenger to the U.S. since our decades of demonization? We have witnessed similar tactics concerning Iran, the supposed major funder of international terrorism, which is a lie. Every President since George Bush 11 has been coaxed and chided into attacking Iran, so far, all have decided to pass. Is Iran an actual threat to U.S. national security? Is Venezuela? 

The U.S. citizens and the world have all seen this theatrical escalation to justify wars and death and destruction without any redeeming result, at least not in the national interest, but likely in the interest of some special interest. Whether it was for the plunder of the oil reserves in Libya and Iraq or the wish list of a middle east ally. These all have ended with disaster for the people of those countries and may continue for several more generations.  In fact, this pattern has eroded U.S. standing in the world, contributed to an escalating debt and imperiled the economic future of our people. 

Donald Trump's instincts wanted to stop this pattern of forever war, so far he has avoided plunging the U.S. into another participation in a major war. We can all see the immense pressure from within and without for the U.S. to take part in military action in many places. Can he say no to Venezuela?

Of course there are those who seek to plunder the resources of Venezuela, all which could readily be bought on the open market to the benefit of all. Then there are those who understand that protracted conflict in Venezuela and South America will be very damaging to Trump's hope of reform at home and his standing in the world.

Then, maybe it is just a hope for some sort of win, similar to Panama and Granada, rather than the risk associated with war in Iran. Trump still has some time to get out of this possible fiasco, but the clock is ticking, the cash register is ringing with costs associated with these forces standing by and the pressure is likely extreme by many factions to pull the trigger. It may be another defining moment in Trump's legacy.

Exodus out of Ukraine underway.

 YOUNG MEN ATTEMPT TO ESCAPE THE INEVITABLE

100,000 MIGRATE IN LAST 60 DAYS

In August, Ukraine softened its rules on cross border migration, it was hoped that it would increase repatriation of citizens now living outside the country. In September and October an estimated 100,000 exited the country. Ukraine also lowered its draft age to 23, it has been incrementally lowering the age from 27 over the last few years. One can assume that it may be set to go even lower, with increased pressure from U.S. supporters, like Lindsey Graham, to lower the age to 18. 

At present, voluntary enlistments are rare with most of new recruits abducted by teams that routinely watch for men between 23 and 60 that are forcibly sent to the front, many assume it is to their certain death.  

It is also reported that infantrymen in most brigades are hopelessly undermanned with officers and commanders often far outnumbering foot soldiers. The life expectancy of commanders, some who have been fighting for 3 years, is far higher than new recruits.

With the prospect of lowering the draft age to 18, one might expect anyone even close to that age, to be a prospective migrant.

In that same time period 50 eligible draftees have died attempting to cross the river into Romania. One can only speculate how many may have been able to successfully escape.

At present the military prospects for Ukraine are growing dimmer with numerous battles in the process of being concluded. It is clear that Ukraine, without direct intervention by NATO personnel, will be continuously retreating over the blood and bodies of its young men.

Venezuela; Libya, Iraq, all over again.

WILL TRUMP PULL THE TRIGGER ON OIL INSPIRED REGIME CHANGE? 

MAY NOT BE AS EASY AS SOME BELIEVE

We see the increase of U.S. forces in the Caribbean in what appears to be preparations for military action on Venezuela. This is supposed to be because of Venezuela's participation in drug running to the U.S.. This is about as believable as "weapons of mass destruction" for the excuse of taking control of Iraqi oil. Maduro should not believe that his capitulation to U.S. demands will save the country from exploitation. Gaddafi, after agreeing to demands was then deposed and murdered, I assume the same is in store for Maduro.

Again, while Maduro may not be the best leader in the America's, it is interesting we are not ready to invade either Mexico or Columbia, at least not yet. Of course the real cause of the drug business is U.S. demand, increasingly legal in states across the nation. As long as there is a massive demand for drugs in the U.S. there will be someone suppling it and many getting wealthy enabling it. 

It seems that the hope is to intimidate Maduro to leave the country and allow the new pick for his successor, Maria Machado, to take over, after all, she already has the international community's endorsement.

It could be a problem, if Maduro, who has already exposed one CIA plot to engineer a coup, decides to hang tough and resist being overthrown both politically and militarily. It seems there is serious preparations being made to militarily resist. 

We can assume the the U.S. can defeat the local military in the populated areas and then secure the oil facilities. It is doubtful that the U.S. will venture into the interior were it will likely find home gown insurgents and lots of others from neighboring countries, both free lancers and secretly supported by some South Americans, who do not like the precedent, who would like to inflict damage on the U.S..

If Trump does pull the trigger on this, we can then assume his " Make America great again" is over. It will be more of the same of the last 35 years of death and destruction. We will understand that powers that be have succeeded in cancelling his hope of turning a new leaf on America's foreign policy. It will also send a message to other Latin Americans that a new colonial power is intent on the business of plunder. It can also be the cause for many of the fence setters to align themselves with other trading blocks and other forms of unified resistance.

10,000 Ukrainians surrounded.

 POKROVSK AND KUPYANSK ENCIRCLED

SURRENDER OR DIE

Two major areas of conflict on the Donetsk battle lines have been mostly decided. The battle for Pokrovsk, which many consider one of the last remaining strongholds in the region has been encircled, with no way of retreat or escape, this is also true to the north in Kupyansk. While fighting continues, in attempts to break out, it is reported this is now unlikely. Sadly, as has been the pattern of Ukrainian strategists, they have never retreated in time to save their personnel. We have seen the heavy losses in Mariupol, Bakhmut and Avdiivka when Ukraine would not evacuate their troops to allow them to fight another day. 

Some believe that after these losses, there are not many heavily fortified areas to the west.  Many of these defenses have been created over 10 years and are not easily replaced. We can see that this is why a call for a ceasefire from Ukraine and the west has been desperately sought.

Ukraine is now in a desperate situation with many places without electricity and new Russian offensives expected in Kherson and Kharkiv. The best hope for Ukraine is a settlement relinquishing territory now claimed by Russia. So far, Ukraine and the EU have refused to make any concessions, claiming Ukraine must regain all its territory. This would have been a possibility before the war commenced and shortly after the onset, but now much blood and treasure has been expended and there will not be a ceasefire or frozen conflict.

The natural geographic future border for Ukraine is the Dnieper river. Ukraine to the west, Russia to the east.  If this war continues until complete defeat, Ukraine may also lose Odessa, its access to the Black sea.

Zelensky refuses to make any concessions most likely because if he does he will be targeted by the nationalists. Europeans also insist on continuing, understanding that NATO and their standing in the political sphere will be greatly diminished.

I suspect that Trump would do most anything to get this over with, but is under extreme pressure to continue from the neocons in his party.

Of course, the biggest loser is the people of Ukraine, a country that could have been the most prosperous in Europe, if it had remained neutral. Its leaders made its choice to join NATO and confront Russia, probably the worst decision made in the 21st century, at least, so far. 

Is Pakistan the west's new proxy agitator.

 ATTACKS ON INDIA AND AFGHANISTAN

SMELL OF WESTERN INSTIGATION

In recent weeks we have seen Pakistan engage in attacks on first India and then Afghanistan. Situated with Iran and Afghanistan on its northern and western borders and China and India on the east, it is a remnant, as its borders, of the British Empire. Pakistan was a created in1947 by the British dividing it from India,  as often the case to intentionally divide to create ethic disputes and continual controversy. Divisions that could be used to continue control in a less transparent way. The country is a constitutional republic, but is in effect ruled by the military. Its military is heavily supported and managed by both British and U.S. intelligence.

Several years ago the president of Pakistan, Imran Kahn, proposed Pakistan remain neutral in its geopolitical leanings, He desired to have good relations with all and stay out of international politics. The very popular and elected leader was promptly removed by a no confidence vote instigated in Washington. There are documented communications to prove this without doubt. Khan did not go quietly and attempted to run for office again and survived an assassination attempt. He was eventually imprisoned and forbidden from running for office. The last election is now viewed as a farce manipulated by the military.

The attack on India is most likely just another attempt to destabilize the government of Narendra Modi, who also desires to keep India in a neutral position and have good relations with all. He has refused to get involved in the Ukraine project and has also refused to stop trading with Russia. This attack was just one attempt to damage his presidency with accusations coming from Canada of India's attempt to assassinate former Indians in Canada, a scurrilous attempt to cause trouble in disputed areas of India, disputed due to drawing of boundaries by Britain.  This was most likely an attempt instigated by the CIA through Canada.

It is all part of the "you are either with us or against us." policy. Peace was quickly restored due to the mediation of Donald Trump. We will soon understand if Trump is a co-conspirator or a victim of MI6 and CIA shenanigans.

As for Afghanistan, it is clear that the U.S. desires the Russian built Bagram air base. Pakistan will find the Taliban and Afghanistan a tough nut to crack, as has others for the last couple of centuries.

India has  now become alienated from the U.S. by the leadership and the citizens. It will most likely not be siding on the west's side in the geopolitical war. 

As for Bagram air base, one would not be surprised if China would soon find an invitation for a very lucrative lease.

Escalating trade war, who will be damaged more?

 IF CONTINUED IT WILL LEAD TO WORLD WAR

OIL PRICES RISE 5% ON WORD OF NEW SANCTIONS

It seems that Trump somehow believed that Russia was now ready to implement a ceasefire and at least temporarily end hostilities in Ukraine. One has to wonder where that idea came from, as Russia has made it clear from even before the war started what's its goals are. It has been communicated clearly and consistently for near 3 years, if you can read and listen you know what has to happen for this conflict to end. Of course the west understands Russia's position, but still believes it can threaten, intimidate, and even cause an economic crisis inside Russia. So far, it has not happened and ironically western Europe, who now has the highest energy costs in the world and whose economies and domestic politics are teetering are attempting to engage in an economic escalation. 

Russia has predictably ruled out a ceasefire that is intended to rearm and refortify Ukraine and then continue the fighting in an effort to defeat Russia. This is either going to end with a understanding of Russia's goals or it will end on the battlefield.

One must remember the two most important necessities in life are food and staying warm in winter. I suspect Russia will have both, long after the rest have succumbed to both realties. Of course, the neo aristocrats in the EU will be dining high and life for them will change little, but there will be consequences.

These new sanctions, supposedly on Russian oil companies, are in fact more sanctions on India and China. Both these nations still have a clear understanding, due to their historical dealings with British empire, that it is still the same recipe.  Any cut in India's oil production will immediately effect the cost or even the lack of oil it sends to the EU. I do not believe India is going to sacrifice its economic health and put the EU first.

The big losers are going to be the EU and then Ukraine, which may soon find that Russia has been in fact restrained in its use of military power. Vital transportation targets have been spared, as has the government buildings in Kiev. In fact, Russia is not legally in an all out war with Ukraine, many in Russia are calling for an out mobilization and a decisive end to this conflict.

Objectively the west cannot defeat Russia, even with NATO engagement because China cannot let Russia loose.  China has tens of millions of young men, if needed, and the manufacturing capacity to swamp the production of the west.

That leaves only nuclear war and Russia will not submit to being defeated by any means. It is indeed a standoff where someone needs to take the first step in ending this and it seems there is no none.

Quietly, much of this is the U.S. hoping to support and defend the dollar, all while increasing deficits and debt and using the dollar as a weapon on the world, all counter productive. It can be expected that great de-coupling in world trade is now in sight. A world with two separate trading blocks. One with 1 billion and one with 6 billion citizens.

It could be a peaceful transition or it may end it everyone's destruction.

Cartels could be made irrelevant overnight.

 DRUG USE SHOULD BE A QUESTION OF PERSONAL RESPONSIBILITY

A POLICY OF TOUGH LOVE FOR THE NATION

We have been in the midst of one war on drugs after another for over 50 years. The record is not much better than the other wars we have been fighting in that time. I would say that they have been simultaneous actions that began with the Viet Nam war. The majority of young men had their first exposure to drugs during their time serving in the U.S. military, before that time most never saw or were offered drugs.  Many who are still alive are still partaking of drugs. 

While drug use is a very serious problem for the nation, it may be dwarfed by the corruption caused by the drug business. Pablo Escobar, the dean of drug trafficking, responding to questions as to how he was able to create an international drug empire, stated that it was very easy, "Pay everyone here and everyone there" That was referring to political leaders and regulators. I suspect this simple answer  needed an added, or else. Take the money and be happy or refuse and suffer the consequences. Very similar to some foreign policy experts idea of diplomacy.

Eliminate the money and the cartels will evaporate, while they may move into other business, none is as steady and lucrative as the drug business. Take away the money and they lose much of their power.

This could be accomplished by the U.S. commissioning the mighty  U.S. Pharmaceutical companies to manufacture every possible drug desired by drug users and then undersell the cartels, even if they have to be free. Also U.S Farmers who are finding a weak demand for products could grow high quality, well produced hemp, poppies and coca with a permanent buyer in the US. government, who would then sell them at an uncompetitive price. untaxed and without profit to anyone but the producers. Even a lose of money by the government would be far better than the death and corruption caused by the present system, that is most likely never to ended. It would put the cartels out of business and also the economies of many south of the border countries. 

As a nation we would be better off.  When was the last time we witnessed a city mayor or other official arrested for taking cartel money, none that I can recall.  I would expect that this money goes to much higher places than mayors and police chiefs. The president and attorney generals of many south of border countries are known to be on the take, are our officials more righteous?

As for drug users, the only hope is that it becomes a matter of personal responsibility. While government rehab should be avoided, private and religious methods could be encouraged. Drug use needs to stigmatized as a bad choice, not celebrated as Hollywood has done for decades. 

Provisions would have to be made to protect children, by enforcing very strict laws and penalties for providing drugs to minors, the most vulnerable to the dangers of drugs.

Free the nation from the evils of the drug trade and hope that users will eventually survive their poor choices. Tough love indeed, love for the battement of the nation in the long run.

Yes, a gold backed currency is possible in the modern age.

 EVERY FIAT CURRENCY ENDED IN BEING WORTH 0

FIAT CURENCY IS LOVED BY POLITICIANS

This past weekend I listened to Warren Buffet, who claimed that gold is not viable in a modern economy. He supported Central Bank digital currency, even though he admitted it would give governments unlimited power over every aspect of life. He believe CBDC would be faster and more convenient.  He also failed to mention that it could be diluted in value on a daily basis without any control. 

Only currency with firm backing can be a real store of value and only such a currency can maintain a sound economy. 

I do believe a gold backed currency is not only possible, but it is the best solution to the crisis that is soon going to engulf the western world. I also expect such currency will be introduced at some time in the future.

For such a currency to be accepted, it cannot be the creation of any one nation, it will need to be a joint effort by a group of nations, the more the better. This is how such a sound money system could work in the modern world.

First this currency would be created for international settlement and commerce. Every nation could still use the currency that is in use for domestic commerce and even for international commerce if accepted. I suspect that it would soon be unacceptable.

This new currency, we will call it UNIT, could only be created with the deposit of gold into a system of banks and bullion storage that would exist in all participating countries. For each ounce of gold, lets say we could receive 480 UNITs, of course these values would need to calculated. These UNITs would represent real gold and could be exchanged for gold, if one should desire. This could be a paper currency, or an electronic deposit, it could be transferred electronically, just like digital currency. It would have all the characteristics of modern trading, except it would not be controlled by any one government and no units could be created without a equal deposit of gold. The audit and control would be facilitated by a board from the participating countries.  

If someone wants to have UNIT they would have to purchase gold in their currency then make the deposit of gold and receive the UNITs. If someone wants to exchange physical or paper UNITS for electronic, the paper UNIT's would be destroyed. The idea is that there would never be more UNITs  in existence whether paper or electronic than a corresponding amount of gold on deposit.

This would eliminate monetary inflation, it would soon require nations to be fiscally responsible, or they would soon run out of gold. It would lower interest rates to borrowers, because it would not include the need to account for the declining value of currency. Lenders could be assured that their loans would not be repaid with depreciated currency. 

It would lessen abuse by governments and central banks, force financial responsibility and would create real sound money and a solid store of value for workers and savers.

I do expect we will see some sort of such system in the near future, it could be participated in by all nations, or it will soon require non participating countries to make drastic changes in their fiscal policies. It will most likely create a flight from fiat or fake currency to real currency.  It would be in the best interest for all.

Gaza ceasefire, more about backing Netanyahu, than peace.

 OBJECTIVES OF CEASEFIRE, MAY HAVE BEEN ACCOMPLISHED

HOSTAGES RELEASED, POSITIVE SPIN

One has to wonder if the great Gaza ceasefire was more about propping up the Netanyahu government in Israel and in the U.S. , and of course a release of the last hostages. Watching the speeches in Israel, as this deal was made, we saw fantastic praise for Netanyahu, " The greatest wartime president in history" and an extreme attempt to point out his unwavering focus on releasing the hostages. Then we see Miriam Adelson brought out as prop for an indication of U.S. donors support for Netanyahu. a message to Israeli's, that Netanyahu is instrumental in maintaining unwavering U.S. support. 

As was expected, it did not take long for the death and destruction to commence. One excuse was that Hamas did  not come up with bodies of the deceased hostages. Did anyone in Israel, in a official capacity, speak to Hamas about this? Is it possible that many of these deceased are still buried under tons of ruble, along with thousands of others, the result of the Israeli devastation. 

Then there is reports of some one in Gaza shooting across the new line. This is of course an excuse to resume bombing and killing dozens more. I suspect that there is little government or control in Gaza and we can expect similar incidents in the future. Good faith on both sides would require communication and cooperation for any such ceasefire to be successful.

I see no good faith, no positive communication, just a pause, waiting for the excuse to resume the killing. I suspect that there is no communication, no commitment for a long term peace and of course no commitment for any self determination of people in Gaza or the west bank. In reality, no hope of a real resolution, other than the elimination of the population in Gaza and the west bank.

Capital gains need to be adjusted for inflation.

TAXING IMAGINARY GAINS

UNREAL GAINS CAUSED BY GOVERNMENT IRRESPONSIBILITY

It is amazing that in today's litigious society that no one has challenged the fairness of long term capital gains that are not adjusted for inflation. While we understand that assets that have a gain, especially those held for a short time do indeed likely have a profit, but gains on assets held for 20, 30, or even forty years old may show an increase in dollar value, but in effect, are actually a loss due the depreciated buying power of the dollar caused by inflated prices caused by government action. 

The average inflation, lets say on asset that cost $1000, could be more or less depending on item or asset, in 20 years is 112% or $2125. so a rise in value of $1125 would actually be the break even amount and that would not include any costs associated with owning that item.

For a 30 year period it is estimated at 147% or $2478, an implied gain of $1478 is actually the break even point.  

For a 40 year period the average rate is 201% or $3010, an implied gain of $2010 is actually the break even point.

While those numbers are revealing the rate in the foreseeable future are going to be far worse, with near double digit inflation rates expected for the some time.

Can anyone argue that this is not indeed actually another fraud caused by the government devaluing the purchasing power of out money and then taxing us on the perceived increase caused by their actions.

Short term capital gains, assets held less than year are taxed at your bracket tax rate 10 to 37%.

Long term, held over 1 year tax rates are up to 20%. but there is no provision for assets held a very long times. these assets should be indexed to account for the cumulative inflation over that time. 

In effect we are being taxed on assets that we held for many years, in effect taking most likely any increase in value that has occurred. By holding those assets it seems the government reaps more of a reward for your having done so, than you. 

Is trade decoupling on the horizon?

TRADE WARS NO LONGER ABOUT RECIPROCITY

CAN CHINA SURVVE WITHOUT U.S. TRADE?

It is no longer trade negotiations, based on using tariff's to address trade restrictions and barriers by trading partners. It is now using trade as a weapon to force submission to U.S. will in not only economic, but political and maintaining geopolitical supremacy.  It is no longer about reciprocity, which was a method of insuring fair trade between partners.

It seems our leaders in Washington believe that the U.S. is essential to the economic health of the rest of the world. A country with a population of 330 million vs a population of over 6 billion. While the U.S is a huge trading nation, it is debatable who will be more damaged by a decoupling of trade with the rest of the world. While the goal for Washington is submission and maintaining supremacy, its opponents understand that as sovereign nations they cannot allow themselves to submit to this intimidation. It is very likely this will  end in decoupling, a suspension of trade that will have uncalculated repercussions around the world.

While some believe that this will rebuild American industry and cause a decline in the economic power of China and its affiliated countries, it seems to be a delusional belief that the world can not survive without U.S. trade.

It is similar thinking that believed that Russia could not survive without selling energy to the EU, a policy that has forced Russia to focus on other buyers and has destabilized the economies of EU nations. The reality is that the EU may have lost the access to Russian energy for decades.

I suspect that if this trade war continues the U.S. is in store for increased inflation, a shortage of essential materials and even a shortage of simple domestic goods. While China and India and others will suffer for some time, they will have access to a market of over 6 billion willing to do business, that is proving to be a mutual prosperous endeavor.

It is possibly the end to globalization in trade and will descend into trading blocks made up of nations focused on manufacturing and essential materials and those who are made up of financial services and consumerism. In the end a very lopsided and unlikely competition.

The solution is co-existence as equals and mutual prosperity, not subjugation and submission. The alternative is a recipe for poverty of nonproducers or war as a last resort to maintain supremacy. 

 

Only fools believe that war can save their economies.

 THE WORLD HAS CHANGED SINCE 1939

WAR WILL BE THE END, NOT A NEW BEGINNING

It is not a secret that the economies of many countries are in dire straits, particularly in western Europe. We hear some who still believe that war can rescue them by stimulating economic activity and of course hoping to acquire assets of others. This has been a historical reality in the past, but the world is a far different place for many reasons.

At one time the west had a huge manufacturing capacity and during the depression, brought about by debt and speculation, that was infinitesimal compared to their debt today, war put all those idle factories and underutilized labor to work producing war materials. Money was supplied by increased borrowing and every aspect of the economy quickly accelerated.

Today those manufacturing facilities no longer exist and the debt is already at unsustainable levels. It will take decades to rebuild those manufacturing facilities and the same applies to the skilled workers to provide the labor. The last few decades has eroded the generational supply of specialized workers in manufacturing. There no longer are workers whose family worked in steel mills and mining that considered it part of their heritage. Only decades of new realities of child rearing that instill the virtues of producing things and a solid work ethic can produce a work force that provides national self sustainability.  

As for the finances to rebuild that infrastructure, western countries are now in a position that they will be having a hard time financing the interest on their past debt. 

It is also unlikely that they can muster the enthusiasm for large numbers of draftees to provide the personnel willing to fight to their death. 

The real solution for their internal problems needs to come from stopping the delusional messaging and entertain a frank conversation with their citizens as to how to rebuild their economies for a self reliant strong future. External threats are not their real problem, but decades of financial nonsense that does not produce real goods and wealth have eroded the financial health of these nations. Attempting to go to war with others, who actually have not engaged in those policies, will end in disaster.

Is Trump engaged in cryptic messaging?

 DOES HE HAVE AN END GOAL?

OR IS IT A DAY TO DAY NAVIGATING MINEFIELDS?

One has to have a certain bewilderment as to what Trump is up to in Gaza, Ukraine, and then there is Iran. The reality and narrative is often contradictory. 

In Gaza, which this ceasefire is a result of Israel's attack on Qatar and the implosion of Israel's political support in the U.S. This seemed to give impetus to bringing together enough forces to at least start a process to some semblance of a better place in Gaza. Only time will tell if this is going to be a reality. The amazing part that we have, or will be witnessing, in the coming days is the outrageous attempt to support the image of Netanyahu.

First there was envoy Witcoff,  Gerald Kushner and Ivanka in a speech to the relatives of the hostages, touting the efforts of Netanyahu in getting the hostages released. They were were met with boos and other negative remarks from the crowd. It was obvious that their presence there was to support the policies of Netanyahu to the Israeli population. This may have been planned as an effort for the domestic consumption, but today, everything is streamed around the world in minutes. I suspect that in the rest of the world it will not get a positive reaction, not for Netanyahu or the Trump team. Kushner also praised Israel for its taking to the high ground by not responding to Hamas in kind, but by its humanitarian focus.

Then there was the address to the Knesset by Trump, where he touted Netanyahu as the greatest wartime leader in history.  Acknowledged Miriam Adelson, who was present, as being instrumental in his policies with Israel, with their constant communication, and that she supported Israel over the United States. He also lobbied for a pardon for Netanyahu, one has to wonder if the whole media operation was orchestrated by Netanyahu himself. Trump knows well that this will be played around the world and also knows that this will be counter productive in raising the image of  Israel. Some will say he is just stupid, but it raises doubts about his motives.

Then there is Ukraine, where the huge tariff's demanded by the U.S. senate, on India and China, to discourage purchases of Russian oil, are a disaster and made the situation worse. Now we hear calls for Trump to Ok Tomahawk missiles for Ukraine, after similar calls, for Abrams tanks, Hi-Mars, Atacms missiles and F-16's, all that made no difference in the direction of the war. It seems Trump will go along and promise these, so that he can claim he has done all that he could to save Ukraine.

The suspicion is that Trump attempted a negotiated settlement, rejected by Ukraine and the EU and now is going to give lots of lip service, but is not going to go to war with Russia. If we recall, Trump criticized Russia as a paper tiger and not a real military force, while many believe this, I suspect he was telling Putin to get this over with on an accelerated rate.

While many are pushing for war with Iran, a potential disaster for the worlds fragile economy, I suspect that Trump is going to try to sidestep that in any way that he can, while giving lip service and even appearances of readying for war.

While, of course much of this speculation, there is no definitive plan by Trump, at least not in public, this leads to speculation. What is obvious, don't listen to what he says, but watch what is happening.

Is a currency crisis underway?

 END OF CONFIDENCE IN FIAT CURRENCIES 

NO WILLINGNESS TO RESTORE TRUST

Are we now witnessing the end of Fiat currencies, paper money without backing and created by governments without restraint? Indications are that the world is on the verge of a collapse of confidence in paper currency and the ability or willingness of  governments to make hard decisions on debt, deficits and financial responsibility.

While this is primarily the problem of the western world, it is a problem in every country, as no country has any backing of its currency. Paper currency was at one time a receipt for a unit of silver or gold and exchangeable. That reality began to be diluted in the 1930's and ended for good in 1971. It has been accompanied by deficit spending, inflation and now has exploded to levels that may usher in a period of hyper inflation and a total debasement of the currency.

Today the price of Gold is $4139. an ounce. silver has broken its all time high and is priced at $51.70 an ounce, numbers that indicate a growing doubt about the viability of the present fiat currency system. While these price increases have been huge and intense, it has actually created a freeze up in the market as the dealers and refineries are deluged with sellers and are unable to soundly price in risk and the future. There could be a temporary sell-off and price decline but many are reluctant to sell solid value for depreciating paper currency. It is an indication that many fear that their holdings of paper currency will evaporate in value and any price for solid assets may be better than nothing.

This takes us back to 1980, only 9 years after the end of metal backed currency, when inflation hit 14.6% which prompted the federal reserve to raise rates to near 20%. I remember receiving over 14% on CD's. Gold skyrocketed to $850 and ounce and silver near $50. The high interest rates led to severe recession until 1983 when a recovery began and gold remained under $500 for the decade. In reality that has been the last actual recession. The debt crisis of 2008 was minimized by more debt and helicopter money, same during the Covid era. No one has been willing to suffer the pain of recession and the liquidation of bad debt. 

Today we see the U.S. government shut down because they are not spending enough, even with a near $2 trillion deficit, same applies to the finances in Japan and Europe all are at the limits of their debt expansion but still talking about more spending. Many are unwilling to believe that these governments are nearing a crisis and others fear that their solutions will evaporate their wealth and assets. The U.S. is now expected to lower domestic interest rates, a fact contributing to this crisis.

The reality is the western democratic socialist economies are in severe trouble and there is no way out without tremendous long term pain. The problems indicated in 2008 have been addressed with more deficits and more inflation.

While many want to blame other countries reluctance to take these currencies as payment or hold their debt, it because of their hope of preserving their own economies rather than going down with this ship. 

We are hearing of solutions of Central Bank digital currencies and the elimination of cash. This would lead to restrictions on what is allowed to be bought and sold especially alternatives to this digital currency. Solutions that will in effect rob workers and savers of their assets to preserve a mismanaged and irresponsible currency system. It would most likely result in worldwide poverty for most.

The real solution is sound money representing a store of value for ones labor and savings. Sometimes the simplest solution is the best solution.

Hostages released, Hope, but difficult negotiations ahead.

 PALISTINIAN PRISONERS RELEASED

AID RESTORED

All 20 living hostages have been released and over 2000 Palestinian prisoners have been freed. Israeli troops have partly withdrawn from Gaza and aid trucks are beginning to enter the area. So far, all is according to the terms of phase 1. While it is a hopeful sign, it is going to require patience, cooperation and a regaining of trust to move to the next steps. 

The first sticking point will be Hamas disarming, it is understandable that they will be reluctant to give up their weapons until their is some sense that they will not be immediately attacked. There is also the makeup of a new governing body that needs to be made up of unbiased and objective leaders that can gain the trust of both sides. This will not happen in days or even weeks, but will be a process one day at a time.

The next phase will require patience from Israel and a clear indication that they are willing to let Gaza exist as an independent entity. The past narrative will need to be realigned if any confidence can be restored. Is this ceasefire is just a needed break in a hope of Israel restoring its image, or is it a real effort for a lasting solution? It will take trust and confidence on both sides for this to succeed, it will not happen overnight.

There probably should be some sort of peacekeeping troops in Gaza, not Israeli, not American or European. Some sort of order will need to be implemented. Thankfully the 200 U.S. troops are to stay out of Gaza, It seems their role is to monitor the situation.

Everyone will be on their best behavior while Trump and other leaders are in the region, it will be up to the Palestinians and the Israeli's to deal with their internal extremists, it seems their are plenty on both sides.  

Real peace can only be accomplished with communication and a real effort to deal with problems jointly, not in an eye for an eye policy or demanding submission. Gazans need to accept that Israel is going to exist, publicly, and only coexistence will end the death and destruction. It will take real diplomats from both sides and a close moderating and involvement from the international community. 

Money, Digital ID and Digital currency.

 MONEY SHOULD BE YOUR ASSET

IF YOU NEED PERMISSION, IT IS NOT YOURS

Historically, at least until the late 20th century, money was gold or silver and only represented by a receipt called paper money. For a deeper look at the history of money https://www.blogger.com/blog/post/edit/219171338015504465/828743332419915216. Today we are being bombarded with all kinds of alternative "money" none of which are an asset and increasingly they are not under your control or available for your access or even in your possession. What ever they want to call it is not money. 

The digital revolution has been a miracle of accessibility and innovation. It has made most everyone to have the ability to access the world in information and commerce. While it is a positive development we are now seeing the potential for abuse, particularly from governments and financial players. One example is digital currency, which has no backing of any kind, does not have the ability to ever be in ones possession and could disappear in the push of a computer button. It is touted as an investment and in some instances has increased in value by 100's of multiples, even though it is not accepted for most transactions.

But now governments, who are most likely the creators of digital currency in the first place, are proposing that they can insure it reliability and convenience by making a government controlled form of "MONEY". Again this new currency will not be anchored to any real asset will not be in your possession and can be limited to transactions only approved and permitted by the government. Every transaction can be taxed, cost fees and if you should fall out of favor for any reason can be  frozen or completely destroyed. 

The European community is expected to put digital currency into use by next year. We can expect it will start out as voluntary, but they have already put severe restrictions on cash or even any transaction that is not accompanied by signed statement from both parties as to what is being transacted, even among family members. The United States now have restrictions and limits on gifts or loans and many are subject to tax. Digital currency will be the most aggressive loss of freedom and rights to everyone in the history of government. Presently Europeans are attempting to move assets out of the country and the accompanying restrictions are being increased by the day.

It will all require a digital ID, which seems to be the newest attempt to track, store information and increase the ability of government to control and monitor your life. The so called, "Real Id" is in effect a national Id, something always opposed by rights advocated. This id's feature will be a digital picture that can be scanned and reveal everything about you, from your bank account, family members, medical history, all stored in a government database. This will be sold to increase your convenience and  your security. 

We can expect this ID will evolve into containing QR codes that will be used to conduct financial transactions, permits, registrations and most likely any transactions everywhere. Those who refuse to comply will be cut off from normal everyday living. Systems similar to this are already in use in China, a far larger country than ours.

Gaza progress?

 PHASE 1 AGREEMENT

HOSTAGE AND PRISONER EXCHANGE, CEASEFIRE

It seems that an agreement has been made on the first part of a Gaza peace deal. Hamas will release the hostages, both dead and alive, and Israel will release Palestinian prisoners. Israel will stop military action and withdraw to a prearranged position. There is still some uncertainty about what prisoners will be released. While this is an agreement, it has not yet happened.

There is concern that as soon the hostages are released, Israel will resume its offensive. This has happened before, but it may be a different situation as the world is focused on this crisis and it may be difficult to pull off a false flag or blame a breakdown on Hamas. There are lot of parties involved in this process and is the best hope of success so far.

The ultimate sticking point is going to be security and enforcement. A situation where Israel is out of Gaza and security and order is maintained by a third party. The makeup of the governing authority will be another problem. If this deal evolves into a resumption of the situation of a Gaza prison, it will not last. We can assume there are forces that will not want this to be a success.

Then there is still the possibility of an impending Israeli attack on Iran. That would lead to a suspension of negotiations as war would create a dangerous environment for the negotiators. Extended negotiations will also make resumption of the Iran war difficult and most believe that as time goes on, Iran will be more prepared to defend against an attack.

It is doubtful that this situation can be resolved quickly, the major questions for a long term solution are ahead and they could take the rest of the year. This is going to put Israel into a dilemma about how to proceed. Hopefully it will end with a satisfactory Gaza plan and the end of hopes for an Iran war.

Desperation everywhere. Ukraine, Euroland, Israel.

WE WONDER WHAT COMES NEXT 

EXPOSURE CONTINUES IN MANY PLACES

It seems we are bombarded daily with a narrative of desperation. No solutions, no, at least no public, strategy or plans to deal with multiple crisis around the world.

Ukraine, approaching 3 years of massive death and destruction, the 21st. century should be labeled the era of death and destruction, and the policy by the West seems to be just more of the same, threats and escalation will bring Russia to capitulate and kneel before them at any minute. It is indicative of biblical prophecy of delusion that ends very badly. The latest desperate act is to offer strategic missiles to Ukraine to attack Russia, of course everyone now knows these weapons will be manned by U.S. personnel and assets. In fact, war that can only end in a nuclear confrontation.

Then there is Euroland, desperately seeking relevance, with economies on the verge of collapse, political instability and leaders whose focus is, is, is who knows? Engaging in political chicanery in Romania, Moldova and at home to hold power. Then talking of conscription and massive borrowing to defend themselves against the self promoted fear of Russian invasion. Sadly, they may be the most desperate of them all.

The U.S. while many still advocate for "America first" is torn by foreign influence from many places. This is indicated by shifting policies daily. If guided by "America First" it would not be that hard, but it seems America had become entangled with foreign powers who demand allegiance or else. The or else is not defined, but is assumed that it could spell danger for family and loved ones or worse. Washington knew what he was talking about, when warning about getting involved in European politics, this could apply to many places. Domestically it seems politicians are desperate to find a cause to rally the citizens to their side, an increasingly difficult trick. Even a government shutdown is now ho hum to most, is this the result of continuously declaring the wolf is at the door.

It seems the British empire still lives, even when it is a shadow of its former self, but has been able through its massive intelligence network, which is probably larger than its military, to be able to cause division and instability and enlist the U.S. military to preserve and enhance its economic power when necessary. With a military of under 50,000 men and a leader with an 18% approval rating, it is the poster child for desperation.

Then of course, there is Israel, whose position as the underdog, was well cultivated to gain the support of many around the world. It seems the lowly Gazans have now usurped their position as the major underdog in the region. Only by the arrogance and hubris of its leaders have they been able to lose their most valued status. Due to their own self destructive polices, they have now set out on another desperate act, and that is to visibly and openly indicate that they will resurrect their former positive image by taking over TIK-TOK and and even have eyes on X. This coupled with openly paying influencers to enhance their image is indeed a spectacular sign of desperation. I suspect that it will result in a further decline of its approval.

Desperation is indeed visible everywhere, the hope is that this desperation will be followed with acceptance, acceptance that the world is changing and dealing with that change will be in the best interest of everyone. The alternative will, without a doubt, lead to much more death and destruction.

$4000 Gold, Bubble or flight from unbacked paper currency?

 GOLD OUTPERFORMS OTHER ASSETS

ALL CURRENICIES LOSING PURCHASING POWER

Today Gold is trading at $3950 an ounce, an amazing number, and it seems no limit to its rise. Silver is at $48 an ounce, very near its all time high and likely to break that in the near future. One would think due to its rapid rise that it is long overdue for a correction due to profitmaking, the dilemma is, sell it for paper currency that is losing its purchasing power at an accelerating rate.

The current U.S. budget has a deficit of near $2 trillion, almost 1/3 of the budget. This translates into further erosion of the purchasing power of the dollar, while this is bad, it is still the best in the western world, the lesser of other currencies evils.

It may still be true that Gold is in bubble territory. It is doubtful that there are many retail average buyer of gold at these prices. That is now probably reserved for silver buying. The Gold to silver ratio is now 82 to 1. Historical, for over 5000 years, that number has been between 12 and 15 to 1. so is gold overvalued or is silver undervalued. At 15 to 1 silver would command a price of $263, or using silver as a basis, Gold at 15 to 1 would be $720.  While gold may be overvalued, silver may be still much undervalued.

Gold it is being reported is being purchased by Central Banks and institutional investors. It seems it is moving out of Europe and into the U.S. and contracts are being liquidated and the gold is being taken for possession. For years gold contracts have been traded back and forth without anyone actually taking possession, that is no longer the case. It is not clear who is taking possession of all this gold, there is speculation that it is the U.S. treasury. The biggest market for gold contracts is the London bullion market and the Comex. Trading for physical bullion is conducted in Moscow and Shanghai where contracts are not sold. There has for decades been accusations that the trading of contracts has been effective in keeping the price of gold undervalued.

The other impetus for the accumulation of gold is the new trading settlement system that is evolving in the non western countries of the world. This is called BRICS-Pay and is a block chain electronic system that consummates transactions in seconds and is done in trading partners currency. This is less costly and quicker than the current SWIFT system. It also is setting up bullion vaults around the world were trade deficits will be settled in gold. The first 2 are in Shanghai and Saudi Arabia. An example is that China can buy oil form Saudi Arabia in Yuan and Saudi Arabia can use that Yuan to make purchases in China and if there is a surplus it can be exchanged for gold. Saudis could use their currency to make purchase in China in the same way. it will make it necessary that trading partners have reserves in gold available. This system will eliminate the need to have U.S. dollar reserves or assets. If the U.S. would be part of this system it could also engage in the same manner. It seems this system will encourage balanced budgets and balanced trading or you better have a large reserve of gold.

The BRICS do not desire that any country's currency becomes the reserve currency, which they believe has led to abuse. While there is talk of a new gold backed currency in the future, the present system may be just a step in that direction.

The reality is that the abuse of fiat or non backed paper currency is coming to an end. Every historical move to fiat currency has ended poorly. In reality, it is a type of fraud that robs workers and savers of their wealth.

 

Hamas says yes, with amendments, Trump orders ceasefire.

 DEAL POSSIBLE, IF COMPROMISE

129 KILLED IN WEEKEND GAZA BOMBING

President Trump released a letter from Hamas accepting his peace plan with certain reservations. The letter was very articulate and constructed to give Trump hope that a deal was possible. They agreed to release the hostages, a ceasefire, and the acceptance of an independent governing body. They will most likely not accept disarmament and one must wonder how Tony Blair became part of this deal, since he is very unpopular in the Arab community for past behavior. Trump has enthusiastically agreed to negotiate details by sending negotiators to begin talks in Cairo today.

Trump also ordered Israel to stop the bombing, but reports are out that 129 were killed in attacks in Gaza over the weekend. There has not been much of a clear response from Israel as yet.

While everyone is hopeful, it is far from a done deal. While disarmament is one of those problems, another is how will any such deal be enforced. It cannot be possible with Israel being the security enforcer inside Gaza. Security will need to be made up of independent forces not U.S., British or European. Malaysia has already volunteered 20,000 troops,  maybe as independent as possible. A joint venture would be best. For a new independent governing body be successful, Israel needs to withdraw from Gaza. Gaza is not Israeli territory. It may be best if a wall be erected between the two for increased security on both sides.

It seems there are talks and approval of these negotiations by the majority of the neighbors in the region. 

World opinion has dramatically turned against Israel, especially after their attempted assassination of the negotiators in Qatar, these same negotiators are now in Cairo. The magnifying glass is now focused on Israel, they broke the last ceasefire deal. There are many who are skeptical that they actually want an end to the Gaza conflict until the people are gone. It seems there is also growing opposition inside of Israel after 2 years of war.

Then there is still the looming question of war with Iran, which seems imminent. Would war with Iran be a quick death for any end to the Gaza conflict?

It is unlikely that real peace is possible without a change of policy from Israel and that may require new leadership.

Bait and Switch Gaza deal dead. WW3 risks rise.

 MEDIA EVENT WITHOUT REAL SOLUTIONS

NO ONE CAN BE TRUSTED, NO GOOD FAITH

It is clear that the deal for Gaza will not be accepted, nor will it be renegotiated. It has been revealed that the Arab community which tentatively approved a deal, saw a far different deal when displayed on national Tv. It seems after meeting with Netanyahu, the deal was changed to make it unacceptable to Hamas and the other Arab leaders, probably intentionally. Of course, now it can be blamed on Hamas and the killing can continue. The deal basically required surrender and perpetual subjugation by Israel.

It also appears that a major attack on Iran is in the works and there is speculation that this will be coordinated with escalation in Ukraine and even a possible attack on Venezuela. Is the plan now to cut oil supplies to China from the middle east, destabilize Iran as vital link in the belt and road initiative and tie up Russia in Ukraine to avoid intervention? A complicated and dangerous plan with many risks. 

There is little doubt that an attack on Iran is being prepared, it seems large amounts of materials and resources moving to the middle east can not be concealed. At the same time we see France illegally boarded and detained a Russian ship in international waters with the public acknowledgment that they want to destabilize Russia's supply chain, an act of war.  Estonia also is advocating embargoing all sea traffic out of St. Petersburg, another illegal act. All this is coupled with political election shenanigans in Romania and Moldova to possibly open another front over Ukraine. There are continuing reports of expanded U.S. preparations for an operation on Venezuela to control that oil and deny it to China and other buyers.

One can expect the subjects of these attacks understand these realities better than anyone, and one must wonder when they may come to believe that they would be best served with a massive pre-emptive attack.

While for a time it appeared we had moved back from a potential WW3, any such plan will indeed be WW3, once it starts, the odds are in favor of ending in a nuclear confrontation.

Is Venezuela a threat to U.S. ?

 WHAT'S UP WITH POSSIBLE WAR WITH VENEZUELA?

DO WE NEED MORE FIRES TO DEAL WITH?

Speculation abounds that the U.S. is expected to take military action with Venezuela. We know that opposition to the government of Venezuela has been a hot topic ever since the election of the socialist government of Hugo Chavez in 1998. Chavez put in many policies of redistribution and nationalized much of the industries in the country. It seems he was elected in a democratic elections and popular with a majority of the country, by a small margin.  He died at an early age in 2013 and was followed by Nicolas Maduro, as he was vice president.  He was elected later in a special election with a narrow margin of 1.5%. In later elections the last which was in 2024 there have been accusations of corruption and fraud. In 2019 many claimed that the country was moving to a dictatorship and the U.S. and Organization of America States considered the president of the Assembly, Juan Guaido as the legitimate president. 

Accusations by Maduro of assassination attempts and internal unrest fanned by the CIA have been prevalent for years. John Bolton under Trump advocated military intervention in Venezuela in Thump's first term. At that time the accusation was spreading communism or his human rights violations in Venezuela.

Recently there have accusations of Venezuela being a major drug supplier to the U.S. While we can expect that there is drug business in Venezuela it is most likely dwarfed by such business in Mexico, Columbia, Canada, and even the U.S.  

As for Communism and socialism, I do recall the whole reason for the war in Viet Nam was the spread of communism, the  domino theory. Today Viet Nam is still a dedicated communist country with government advocacy for communism on the internet, yet it is visited by American presidents and has most favored trade arrangements. I expect, like much like our middle east policy, it is all about oil. Oil that Venezuela would sell in any amount, one would desire to buy.

The biggest method of the continuation of dictatorships and communist dictatorships in particular, is the always continuous external threats, sanctions and fear of foreign intervention.  Communism and socialism are failed economic policies that will in time fail, as in the Soviet Union and even in the western democracies. Foreign intervention and threats will usually unify the citizens around even the leaders they despise and thus prolong their power.

Secondly any military intervention in South America will raise red flags and anti-Americanism to new level in other places that view the U.S. as a bully and needs to be feared, opening the door for real opponents to take advantage.

I suspect that U.S. has enough crisis that it needs to address, without looking for more. Venezuela is not Panama or Grenada and the world is far different than in the 1980's. 

Military reform, a positive move for military morale.

HOPEFULLY THE END OF SOCIAL ENGINEERING IN THE MILITARY 

ALL STANDARDS TO BE BASED ON MERIT

Yesterday, Pete Hegseth, the head of the defense department, made his big speech before the high ranking members of the military. It was a surprisingly well delivered and appropriate speech in an effort to restore the integrity and morale of the United States military. It was in effect declaring the end of social engineering in the military, an end of all woke policies and return of uniform standards for all without special cutouts or exceptions, especially for combat soldiers.

All soldiers would need to qualify on a semi-annual basis, combat standards would be based on male expected performance. Uniform and personal hair and beard standards would be uniform as in former times. He stated that these standards would be the same for all members of the military.

I would hope that there would be still exceptions for the older commanders of the military, if look at the past we have seen in war some of the best commanders would not have been able to compete physically with 20 year old soldiers, General Schwarzkopf and in fact the present commander in chief would be good examples. Many of the high ranking generals of the past were valuable for their experience and decision making ability rather than physical ability. 

I watched all of Hegseth's speech and part of Trump's, I think it would have been best to have let Hegseth have his day, Trump did his usual political highlighting of accomplishments. The major statement he made was reiterating that the U.S. is in effect, out of the Ukraine conflict. Weapons would be sold to the EU members and they can do what they want with them. He made it clear that there will not be any more aid to Ukraine. We will see if this is true.

Many believed this was some sort of preparation for war, but I believe it was just the much needed reform to make the military a high morale and cohesive fighting force, as in the past.

Gaza peace? Iran war part 2, imminent. Escalation in Ukraine.

 PEACE, PEACE, WHEN THERE IS NO PEACE

WORLD OPINION HAS FORCED TALK OF PEACE

Yesterday we saw the unveiling of Trumps 21 point peace plan for Gaza. It seems there is some sort of agreement between Netanyahu and Trump, but only time will tell, if any of this will come to reality. One may suspect that world opinion and U.S. public opinion in particular forced at least a public acceptance, with the hope that it will cool off the opposition to Netanyahu's plans. It contradicts much of Netanyahu's speech at the UN. 

At the same time we hear U.S. aircraft refueling tankers are heading to the region an indication that the next strikes of Iran are imminent. U.S. personnel in Iraq are set to be withdrawn by the end of September. It is reported that Iran fully expects and is doing all that it can to prepare for this attack. One wonders if this was the priority that was talked about in Washington.

A war with Iran will most likely be far more intense this time and may have an increased assistance from the U.S.. It is doubtful that any ground operations will be involved other than possible sabotage efforts. Some believe the attack on Venezuela will be coordinated to replace oil supplies lost from the region in case of a closing of the Hormuz straits.  All of this is of course speculation based on the movements of resources, but it is generally assumed that war with Iran is a priority for Israel. This has the possibility to bring in many players in the region particularly in the gulf where there are U.S. bases. 

Then there is talk of Tomahawk missiles to Ukraine, if it should  happen it would be the biggest escalation in this conflict. These missiles are strategic  nuclear capable missiles and  these missiles which would be manned by U.S. personnel and U.S. targeting assets, it would be very close to a declaration of war by the U.S. against Russia. Most believe this is another bluff particularly since the sanctions against China and India have died a quiet death. If this should happen the whole situation in Ukraine will become much more violent.

Russia has called this operation a Special military action, it has not declared war on Ukraine. Russian policy is very much guided by descriptions of actions and pre ordained polices.  Contrary to western narrative, this has not been an all out war by Russia, it had one call up of reserves and has grown and maintained its troop strength by voluntary enlistment. It has not placed the Russian economy and assets in a total war footing. It has refrained from attacking government buildings in Kiev or the vital bridges over the Dnieper river. It has been a war of attrition hoping to degrade the Ukrainian military and the ability of NATO keep up the supplies. It has been generally successful. Russia has more devastating conventional assets it has not used,  and of course huge nuclear assets. U.S. strategic missile attacks will undoubtedly cause Putin to give in to the internal forces that have been calling for the decisive end to this conflict by all out total war. If that happens, no one can predict where it will end.

This can only bring to mind the bible verse in Jerimiah, " Peace, Peace, when there is no peace"  talking about the insincerity of those who talk about peace but want war.

Comey indicted by Grand Jury.

 SEEKING JUSTICE OR TRUMP REVENGE

THE NATION NEEDS ACCOUTABILITY TO RESTORE CREDIBILITY

The indictment of James, Comey, former FBI director, is the first indictment in the hope of having complete disclosure and accountability in the Russian Hoax scandal. There may be many other Grand Juries underway as there is a long list of government officials who have obviously lied under oath and conspired to destroy the Trump first term.

There is lots of video evidence against Comey and others, plus documented proof that the FBI knew before Trump's inauguration that the Steele dossier was fabricated by Christopher Steele, a former MI6 agent, working for lawyers of the Hillary Clinton campaign.

It was also documented that Adam Shiff and others knew that the Russians did not hack the Democrat National committee, but was copied from the DNC computer in Washington and then handed to WikiLeaks. It became obvious when lawyers for the Russians asked to set a court date and demanded disclosure that the whole thing collapsed.

Many today want to believe that Trump won against Clinton because of Russian help, a weak excuse for the loss. 

This last decade of lawfare and fake prosecutions is unique in that many were conducted or had the assistance of government officials, it has resulted in the loss of creditability of most every institution of the government. We witness the result today with many believing that there is no justice or ability to count on a unbiased intelligence or legal system. It is a very negative environment for meeting the challenges that need to be addressed by the country. 

Only a full disclosure and accountability for those who intentionally broke the law, will be a first step in restoring the necessary credibility of government agencies. 

Can the new Geopolitical realities be accepted without war?

 THE WORLD HAS CHANGED, COULD IT BE A POSITIVE DEVELOPMENT?

MUCH OF THE WORLD IS ALREADY ACCEPTING THE NEW REALITIES

Watching many of the speeches at the UN meetings this week, it is a window into the changing world that is no longer reversible. Can a new geopolitical and economic world be a positive development, for all those who are willing to understand the realities of the dying present system.

The breakup and the reinvention of the former Soviet Union into a functional and prosperous  reality should be viewed as an example of the possibility of a peaceful transition. Of course, today this is heresy in the western world, Russia is evil and must be confronted and contained or else the world is at risk.  Most are not willing to accept that Russia made a conscious decision to end communist rule and move to a better place for their citizens and attempted to become part of the world community. A naïve idea in retrospect, no one becomes part of the present community without  one major compromise, total submission to the present dominion.

The same goes for China, no matter that China has become the undisputed manufacturing giant in the world, it has not fully submitted to the present ruling class and must be held in check, or even destroyed.

The reality is that the democratic socialist countries of western Europe and the United States are no longer the masters of the universe. Since it seems marital unions are now a new description of alliances, the majority of the world is in the process of a, hopefully peaceful, divorce from its abusive spouse.

While Europe continues to talk of war with Russia, they are delusional, because they no longer have the economic or political strength or unity to engage in such a war. Daddy is making it clear, that the U.S. is not going to engage in war with Russia. I suspect there is a unspoken acknowledgment in high places that this is the reality. Europe needs massive reforms to, in fact survive, in the coming new economic global environment. They should be apologizing to Russia and hoping that they will renew long term energy contracts to allow them to economically survive.

The end is coming to all former rails of domination, the dollar is nearing the end of its dominance, because it is backed by $37 trillion in debt and rising by the day. Military dominance is now often neutered by modern cheap weapons and countermeasures to negate the advantages of expensive and complicated weapons. The same old truths about war are still real, in that without actual conflict and defeat of the enemy on the ground, it is only a temporary and fleeting victory. Unless of course, one is willing to go all out with nuclear devastation. That is the fear and possibility, when great powers find they are no longer able to dominate the world.

Without the use of nuclear weapons, the west cannot defeat Russia, in fact, if Russia would be on the verge of defeat, they would either use these weapons themselves or, China, knowing that they are in the same lifeboat with Russia, will come to their aid.

Same goes for Iran, no one is willing to attempt to engage in a land war with Iran, just look at a map, A deadly quagmire for any rational analysis. Only a devastating nuclear attack can result in a very hollow victory.

Everyone has now witnessed the process of regime change chaos and devastation, it is now a defunct policy.

We see that Africa is finally becoming unified enough to end all the leftover colonial rules. They see new possibilities with better economic and trade deals with China, and other countries in the global south. While many are still on the fence, they are more and more leaning to a new era of global cooperation and mutual prosperity rather than being controlled and dominated or else. 

Of course the emerging new powers in the world may become obsessed with power and control just as the former, but if objective, we all need to admit the present dominion is no longer possible, due to the economic irresponsibility and an unwillingness to address the need for reform and changes internally.  The sooner that a policy of mutual respect, cooperation and a goal of mutual prosperity for all, becomes the new vision for the future, the sooner the world can accommodate the inevitable transition that is underway, without a massive toll of death and destruction. 

Crunch time for Middle East.

STANDOFF ON MANY FRONTS

NO SIGN OF COMPROMISE FROM ISRAEL 

This week we witnessed the recognition of a Palestine state by the major powers of Europe, Netanyahu's response was a quick and definite NO. This is sure to be followed by economic sanctions and other efforts directed at Israel. The reality is that the formation of a Palestinian state is far more complicated today than it would have been 3 years ago. At the same time, world opinion both from the middle east region and the majority of the world has solidified in opposition to Israel's polices in GAZA and its proposed policies in the west bank.

We hear more everyday about Israel's plan for a "Greater Israel". This would call for the expansion of Israel to include GAZA, the west Bank, Sinai peninsula, parts of Jordan, Syria and Lebanon. This plan has been voiced by members of the Israeli government and never denied. Some even include further expansion, if this not a real Israeli proposal, it should be made clear.

Then we are again back to Iran, it is no secret that Israel has attempted to instigated a possible war with Iran and the United States for over 30 years. So far, every president has rejected going to war with Iran, the pressure is coming again in the coming weeks. In the negotiations about nuclear enrichment, originally the deal was to limit enrichment to what is needed for nuclear energy. When it appeared that Iran was on the verge of accepting that deal, the anti was raised to end all nuclear enrichment, placing Iran at the mercy of outside sources for their nuclear energy and desalination projects, a limitation that has not been placed on any other country. This was pushed by Netanyahu, who knew it was a affront to Iran's national sovereignty and could not be agreed to. These negotiations ended when Israel attacked and assassinated the leadership in Iran. Some believe that Israel hoped the U.S. would then step in and destroy Iran.

This week Iran made it clear that they will not accept having no ability to be independent for their nuclear programs. They also will not allow IAEA inspectors who they believe, and are probably correct, that these inspectors identified Iran's nuclear scientists and residences for assassination. We can expect this will lead for calls for military action against Iran.

Some months ago Iran entered into a mutual cooperation deal with Russia and it is reported that Russia offered them a mutual defense pack which was rejected by Iran. Iran it seems does not want to become dependent on Russia and believing that they have the resources for their own defense.  

Since the June war, Russia has made available to Iran,  new jets, S400 anti aircraft systems and electronic counter measures, all defensive weapons. China has also been furnishing Iran with updated weapons. We can expect all this knowledge is made available to Israel via U.S. satellite intelligence and every day Iran become more able to counter an attack. Both China and Russia consider Iran a pivotal player in their future commerce plans and while they may not directly militarily intervene they have a huge stake in an independent Iran. They also could have a strong ability to enable compromise from Iran.

In the June war it is clear that Trump did not come to Israel's aid and Israel suffered some severe damage to its infrastructure and depleted its defensive missiles. Again, there are reports that Netanyahu told Trump to end this or they would resort to a nuclear attack on Iran. We then had the attack on Iran's nuclear facilities, a prearranged ceasefire negotiated by gulf countries with Iran and Trump declared victory. We can now expect, particularly since Israel's position is now more precarious, that we will see a replay or attempted replay. It is possible that Netanyahu cannot politically back down and it is not clear if Trump will commit to war with Iran. Can Netanyahu trust Trump to come to Israel's rescue?

Again, like in the Ukraine conflict, Trumps power is in saying no, rather than yes, to military assistance. Every day the pressure for Israel will get more pressing and also the pressure on Trump to promise assistance. The real danger for Israel is that Trump will say yes, but then say no.

While nuclear weapons against Iran would not directly affect Israel from fallout, they are unusable against other regional powers, one would expect that if Israel uses nuclear weapons, they will be attached conventionally from all sides. It is doubtful they could last a week, even with U.S. assistance. Most believe Israel has a closing window on being able to attack Iran.