“As the saying goes, time is money, but when you turn back time, you gain valuable truths. “Money is time.”
– George Gissing
divine disorder
Time, like money, provides unique indicators. There is something to calculate and compare. What you can use to measure progress – and fail.
What is your annual income? July 4, 2021 How many hot dogs did Joey Chestnut eat in 10 minutes? What is Bitcoin’s annual return? What is the maximum MPH of a 1969 Ford Mustang at sea level?
In fact, the ticking of time makes everything seem very organized, orderly, and orderly. Almost direct evidence for deism. 60 seconds make up 1 minute, 60 minutes make up 1 hour, 24 hours make up a day, and a day makes up one revolution of the Earth.
The Moon orbits Earth approximately every 30 days, which is one month. Then, every 12 months, the Earth orbits the Sun. This is one year.
So far so good, right?
But here’s where all that nice, neat order falls apart. Because trying to measure one of Earth’s orbits around the sun over a period of several days isn’t very clean. That’s because it takes 365 days plus an inconvenient six hours to fully complete one cycle.
That said, our time-measuring system is not perfectly accurate. Moreover, these inaccuracies provide a striking measure of human shortcomings.
Of course, we don’t let these uncomfortable six hours get in the way of our perfection. After all, we are human. We innovate, invent and create the world in our image. So when the numbers don’t waver, we do what we have to do. We purge them.
We create off-balance sheet accounts. Round to the nearest cent. We devise a negative interest rate policy. And we invent leap years.
meaningless abstraction
This Thursday is the settlement day. A day when the books must be balanced.
When we look at our off-balance-sheet accounts, we find 24 hours accumulated due to incomplete time records over four years. This time, a kind of debt jubilee, must be written off.
Therefore, we must have a day of reckoning for the disorder of the past four years. We need to resynchronize the calendar year with the astronomical year. Additionally, the measurement system must be recalibrated using reference points, i.e. reference points.
Without this resynchronization, what does a year really measure up to?
Perhaps the calendar won’t deviate much for 10 to 20 years. But in just 28 years, the calendar will be off by an entire week. Soon thereafter, the calendar would be reduced to lines carved inside cave dwellers’ caves. A meaningless, meaningless abstraction.
Giving an extra day once every four years to align the calendar with the sky is a small concession. In reality, it could be much worse.
Time is only scarce by 6 hours per year, but any currency that is not backed by gold or any other commodity or limitations beyond human control is an arbitrary construct. When it comes to the US dollar, what is it without a stable base to hold down supply?
It is abstract, unclear, and arbitrary. It can be created out of thin air at the whim of the Federal Reserve and then spent on the economy through Congress and the Treasury.
One day, when your pockets are full of dollars, you can buy whatever you want and need. The next day, these same dollars may revert back to their intrinsic value equivalent to the cage liner.
and What Happened to Penny Candy?still?
helicopter drop
At one time, the US Treasury’s budget and the Federal Reserve’s credit creation machinery were constrained, making the dollar convertible into gold possible. Therefore, the expansion of trade imbalance was also limited. But that was before Nixon broke the dollar’s relationship with gold and initiated the dollar reserve standard.
Before 1971, foreign banks could exchange $35 for an ounce of gold at the U.S. Treasury. After Nixon closed the gold window, when foreign banks handed over $35 to the U.S. Treasury, they received $35 in return.
At the G-10 Rome meeting in late 1971, Treasury Secretary John Connolly reduced the new dollar reserve standards to bite-sized chunks (bumper stickers) for European finance ministers.
“The dollar is our currency, but it’s your problem.”
Unlike gold, which has no debt obligations or counterparty risk, dollars can expire worthless when promised obligations are defaulted. Or they could be inflated when a desperate Washington forces the Federal Reserve to fire up the printing presses and drop suitcases full of money by helicopter into major city centers.
If this helicopter drop concept is new to you, let me tell you, it’s no joke.
In fact, former Federal Reserve Chairman Ben S. Bernanke said the Fed would do just that during a financial crisis. He explained this very clearly in his speech on November 21, 2002: Deflation: Don’t let “that” happen here.
Bernanke then offered the following insight as Federal Reserve President:
“The U.S. government has a technology called the printing press (or its electronic equivalent today) that allows it to produce as many American dollars as it wants, essentially for free. By increasing the amount of U.S. dollars in circulation, or even credibly threatening to do so, the U.S. government may reduce the value of the dollar in terms of goods and services. This equates to increasing the dollar price of those goods and services. service.”
Later in the same speech, Bernanke referred to “helicopter drops,” alluding to central bankers hovering in helicopters and dropping suitcases full of money. William Jennings Brian “The Struggling Public” below.
Notably, this rationale was the basis for the abundance of stimulus checks sent by the Treasury during the coronavirus crisis.
judgment day
The dollar may not have any value yet. However, persistent volatility is an ongoing problem.
How do you save and invest as the dollar’s monetary base continues to inflate? How do you protect your investments during periods of sudden and temporary credit contraction?
When Roger Bannister first broke the four-minute barrier in 1954, running a mile in 3:59.4, everyone was convinced of both the distance and the time. A mile is always a mile. And 3:59.4 will always be 3:59.4. Nothing more. Nothing less.
Conversely, when a saver gives away a dollar, he or she has no guarantee that the value of that dollar will be preserved. For example, using the Bureau of Labor Statistics’ own data: CPI inflation calculatorOne dollar in January 2024 will have the same purchasing power as $0.13 in August 1971. This is the month and year when the last link between the dollar and gold was broken.
Where did the remaining $0.87 go?
In fact, it was secretly stolen from its guardians and redistributed by the government. This is undoubtedly a national disgrace.
Over the past 111 years since the Federal Reserve came into existence, and over the past 53 years since the Nixon Shock, the baseline (dollars) used to measure the value of goods and services has been distorted, almost like a politician’s baseline. vertebrae.
The amount of dollars in existence has increased. Accordingly, the value of the dollar unit also fell.
To be clear, the prices of individual goods and services will fluctuate to account for natural changes in supply and demand. However, when money is anchored to a stable reference point, as was the case during the classical gold standard era of the 19th century, overall prices will remain largely stable.
In connection with recording the passage of time, we record leap years as necessary, important, and appropriate to maintain calendar year baseline consistency. Likewise, today’s money needs a stable foundation to derive its meaning and value.
Without that reference point, we will continue to get off track. Your currency will continue to accumulate more zeros after every measurement. But what good is a $100 bill if you end up buying the same thing that a $1 bill did before?
Then enjoy today’s settlement. Time was there the whole time. There was just a need for reconciliation.
Unfortunately, we have a surprising suspicion that taking into account distortions in the dollar reserve base will not be very favorable. Although it is necessary, it is all the same.
[Editor’s note: Do you know the smartest thing you can do during a recession? Simply put your fear aside and do the OPPOSITE of your friends and neighbors. >> Here’s why and how.]
thank you,
minnesota gordon
for economic prism
Return to the economic prism in Judgment Day
