Nostradamus said:Just a quick thought on that quote:
You just need to design a solid oversight mechanism.
Why bother designing any kind of control when the real pros will just find a way around it anyway? Gold doesn't permit manipulation; there's absolutely zero wiggle room there. Let’s be realistic: everyone from local police and legislators down to the poorest citizens can be corrupted by greed because, at the end of the day, everyone dreams of turning a profit and living large. If people over the last few thousand years had actually figured out how to build foolproof oversight, they would have done it long ago. So, unless you want to propose a mechanism that leaves zero room for maneuvering, don't bother applying your model. Gold has its own built-in psychological advantage: everyone wants to earn it, but nobody wants to deal with the hassle of moving it. That's an excellent control mechanism in itself.
No, I just stumbled upon some absolutely fantastic claims on this last page that defy belief. Then again, these same forum users have their moments of insight. It’s just living proof that intelligence is a relative term. As Einstein might say in a poorly translated version of Dvornikov's rhythm: Move it, move it...🤣
And how exactly does China plan to sustain that kind of growth? It isn't nearly as simple as it looks. Once you inflate GDP through loans, debt, and handouts—call it whatever you want—that growth becomes unsustainable. It can't go up forever. Eventually, you hit stagnation or a full-blown decline. And then what? The only economies with actual long-term prospects are those that reward hard work, net savings, and investment fueled by those savings. Up until now, the Chinese have had plenty of that. But relying on "gifts" is dangerous; it sends the message that profit isn't earned through labor. Besides, who decides who gets a gift and who doesn't? When you combine handouts with increased consumption—which is exactly what China is doing by boosting imports—you undermine the value of labor and income. A nation on that path is headed for an abyss; inflation or deflation are just the inevitable results. If you want to import goods, you need to be able to pay for them with real earnings. Relying on gifts while simultaneously ramping up imports is a guaranteed recipe for failure in the long run. The winning formula remains labor, net savings, and investment. And the absolute prerequisite for all of that is the rule of law. That said, I agree with Maria Thomas48 that this current system is unsustainable. The sheer scale of credit expansion and greed is massive...
Gregory Williams7 said:Dear Mr. Stole, you are unfortunately failing to see the big picture, focusing instead on mere fragments. In what way did Hitler exert pressure from Germany? He did so by issuing credit money to pay off reparations from World War I, effectively exporting inflation beyond his borders. This is precisely what the USA is doing right now. We all know what happened once the world realized the truth.
The USA did not build 30% of Europe's GDP from scratch; rather, they simply restored Europe to its pre-war status. There is a massive difference between repairing what was broken and creating something entirely new. Europe possessed everything: the conditions, the experience, the workforce, the industrial mindset, the education, the tradition, the knowledge, and the technology. The war only damaged the infrastructure. I hope you will agree that raising GDP in such a manner is quite simple.
Precisely. So, what is the takeaway for our current situation? For both the public and the government to value actual assets again, we have to restore the values you mentioned above...☕ Speculation has overtaken manufacturing... That is why today's landscape is so much harder to navigate than it was a few decades ago. Once that shifts, we'll be out of the crisis in an instant.
Gregory Williams7 said:Honestly, I find it hard to believe you two are still debating this... If this is such a grievance for you, my only suggestion is to stop using money altogether. Just quit using it and live your life that way.
Personally, I am perfectly fine with the interest rates offered on my savings accounts. I appreciate seeing my capital grow over time without having to put in any extra manual labor. It works for me, and I have no intention of changing it. Where that money originates doesn't interest me. I certainly don't need explanations from conspiracy theorists. I simply recognize that this system has functioned this way for an incredibly long time and will continue to do so for the rest of my life. I intend to take advantage of it.
The fact that someone took out a loan they cannot repay and is now complaining that the system is impractical—when it actually functions perfectly every single day—is solely their own problem. It is time to get serious.
That's debatable. When you consider the current state of the USA, it's simply incorrect, especially since inflation is already outpacing interest rates. It has been proven countless times that printing money doesn't work, yet that is exactly what is happening right now...
Gregory Williams7 said:That is precisely what he ignores. He relies on a mathematical formula spanning twenty years, yet completely disregards any newly emerging values. To him, those variables equal zero. Consequently, his model fails to account for reality; according to his logic, the system should have collapsed ten years after its inception—somewhere around 5000 BC. But it didn't. It survived. Even today, it remains operational. How can he express such bewilderment that the system still functions when his own mathematics dictated its demise? We attempt to explain the discrepancies to him, but it is like talking to a brick wall. There is simply no way to make him see reason.
Regardless, he is merely one lost soul. For ages, he will continue to shout, "It should have failed!" And perhaps some people will believe him. However, practice will always dictate the truth, no matter how loudly he cries out. As for me, I am still paying my bills in US dollars, managing my savings, loans, interest rates, and inflation. Everything continues to function perfectly. No matter how much he shouts.
The system is extremely stretched right now. And by "extremely," I mean critically overextended. Loans were handed out like candy to people who had no business taking them. Look at the Greece bailout: the Federal Reserve is preparing 90 billion euros! It's a precedent that paves the way for bailouts for much larger debtors like Italy and Spain. The IMF has lined up 500 billion dollars. Greece is contributing 2.5 billion of that. All in all, this is inflationary for the EU, even if it doesn't hit as fast as it did in the USA. In that regard, Ben Bernanke and the Federal Reserve are becoming increasingly hard to follow regarding gold purchases, now that the patterns are obvious. Regarding inflation in the USA, American media is already spinning it as a positive move for the country, and it looks like they're planning to introduce a VAT. So, while things seem to be working for some, they aren't working here. Energy costs have spiked, many companies are looking to move production to Mexico, jobs are disappearing, and the budget is questionable, to say the least. For instance, the FAA took a 100 million euro loan from Hyp. Just one state entity is taking on debt almost as fast as Eric Dickerson. What you’re describing might work under reasonable circumstances, but here, the weak links are starting to snap. Nostradamus actually has a point. If the Eurozone continues with these bailouts, the standard of living—specifically the purchasing power of the euro—will drop within the next year or two.
Savings should always outpace inflation, and credit ought to be strictly reserved for production, backed by substantial collateral. That is how you create real value while keeping the system rock-solid. According to the laws of supply and demand, prices will drop—it’s simple math. Savings, by definition, imply lower consumption; therefore, prices go down. We can debate the specific vehicles used for saving, but it is the only thing capable of sustaining the system without falling prey to speculation or corruption. Frankly, I don't care if a bank collapses; as long as it isn't the taxpayers footing the bill, they'll think twice before gambling next time. If we need to tighten the credit tap until enough capital accumulates, then so be it. For me, savings are the only true source of security. Even if savings lose some value, you aren't starting in the red. It's just a matter of lifestyle. This is why the right to start a business should belong to those willing to make real sacrifices over multiple generations, not speculators. Or, naturally, if you have a legitimate income someone is ready to pay out immediately.
I see you get the point about credit cards and how money leaks away needlessly, but I still disagree regarding savings. One might jump to the conclusion that keeping money in a bank is a bad move. Personally, I expect my bank to invest those funds into productive ventures and pay me out for it. If someone ends up in the red or failed to run the numbers correctly for their small business, that’s on them. You can't generate profit that way, and nobody else is to blame but themselves. So, I believe the formula "work + savings" is viable. It is incredibly difficult at the start, but hypothetically imagine if most people operated this way. The value of money would rise simply because there would be less—or at least no more—of it in circulation, and prices would likely drop as demand falls due to increased saving. Gregory Williams7 made a good point that the capacity for labor is limitless, and by extension, productivity is too... I would add that any scenario where a person doesn't spend more than they earn is a win for society. Broke? Build your position step by step; don't dive into everything until you have a solid foundation. That is the root of the crisis. They handed out loans like candy to people who couldn't possibly pay them back. For instance, the US government shouldn't be taking out loans to cover its deficit. A guy like Koch wouldn't be able to get a loan unless it was for production plants rather than refinancing existing debt... and so on. If we only extended credit for production and taxed consumption instead, things would be much easier. Of course, that requires stripping away all those various taxes on production and wages. That would actually incentivize both work and saving.
Of course the system is inverted; there’s no debating that. But I honestly don't see why you assume one person's production and savings necessitates someone else's loss. If the other party also saves or simply avoids spending what they haven't earned, there is no loss. It requires rejecting debt and current standards, but it is the only way forward. By definition, saving means reduced consumption. If the money supply remains constant, prices must drop as production increases. The point is to scale back consumption to realistic levels until you establish a solid position. In fact, this behavior needs to be permanent. Anyone spending more than they can afford is essentially incurring a loss. Under such a framework, we should eliminate the ability to print money and run budget deficits. Once again, your diagnosis of the situation is spot on, but the only solution I see is what I've described. The debts are massive and largely artificial, and I've already told you how to fix it. You argue that in my proposed system, individuals and companies would go bankrupt because they couldn't pay their taxes. I fail to understand why you think the government would continue spending if it doesn't collect tax revenue. It simply won't spend! That is exactly what we should strive for: everyone being self-reliant and covering their own costs. You're forgetting that if we pulled dollars out of the system to increase their value, prices would fall, which means less tax revenue would be collected nominally. Therefore, your sacrifice would be rewarded with high purchasing power and lower tax burdens. The only rule for the state is to avoid a budget deficit, while people and firms must always produce more than they consume. If you can't manage that, don't participate in the market as a business—just exist as an individual. In that case, living off the land or something similar is acceptable. But you simply do not go into debt or incur costs until you have built up a position. Eventually, the market would surely find its equilibrium through the law of supply and demand. You cannot spend what you do not have. Hard work and saving are the only winning hands.
The issue lies with war profiteers, corruption, and whatever else you want to call it. Money supply isn't actually the core problem here. I don't see why you think high growth is impossible under these conditions. The real hurdle would be kickstarting the avalanche. The system would struggle initially because capital needs to accumulate, but after that, things would accelerate as prices inevitably drop. Eventually, it would all run smooth as silk. The secret to banking profits is simple: they pay out salaries and issue loans in amounts smaller than the total deposits they hold. That should serve as a built-in regulatory mechanism—if savings levels drop, bank earnings drop too, forcing the system back into equilibrium. The key is just ensuring the outflow remains lower than the inflow. Even if a bank fails, the money supply stays the same or even shrinks, which is actually a good thing. Prices would find a new equilibrium, and people would think twice before lending or saving. It would force labor and production back onto solid ground. There’s no other way. If human greed and corruption outweigh common sense, the whole system collapses. Otherwise, it works. The root cause is corruption and the desire for an easy life without putting in the work. Forget about sustainable monetary profit if there's no actual labor or savings to back it up. And I agree, the system is fundamentally broken; there's no debate there. What I'm saying is that the manipulation itself can be turned against those who use it.
Maria Thomas48, let’s look at this logically. Imagine we agree to stop printing money entirely. Every single bit of labor and every product produced gets paid for fairly and immediately. We also agree that a portion of what we earn goes straight into savings, and only a fraction of those funds can be used for credit. To make it work, a community, a group of citizens, or even a private firm would commit their labor and earnings to support the Bank for Banks and its staff. Crucially, total earnings plus any credit taken cannot exceed the actual amount deposited in the bank. Doesn't it seem like this would force everyone to actually work to earn something? Competition would naturally drive prices down, keeping the whole system sustainable. That’s the core of it; anything else is just pointless noise.
Gregory Williams7 said:Nostradamus: Banks can be forced into losses through several methods: defaulting on debt (writing off uncollectible loans as losses), taking out loans in a currency that eventually devalues against the local currency, or even just keeping savings in a specific bank where interest payments count against them, and so on.
As you can see, there are numerous ways to drive a bank into a deficit. The system is designed around a fixed ratio of depositors to debtors. It was never intended for a scenario where everyone saves, or where everyone takes out loans simultaneously. If that happens, the entire system collapses. That is the point you seem to be missing. What happened to your friend is simply his own misfortune. It doesn't affect me, as I have conducted business profitably for years. I reinvest my profits and help others generate their own. It is a self-sustaining cycle—a perpetual motion machine governed by the laws of supply and demand. Just because you cannot grasp it does not mean it isn't working. 😉
Robert Vaughn10: I agree with your assessment, but I still believe that taking out a loan in a specific currency just because you hope you won't have to pay it back is a mistake. That applies to both individuals and the government. You see certain things, and I see them too. I agree that the dollar will drop significantly at some point. However, that remains speculation by definition. You might be right today, but tomorrow that gamble could come back to haunt you. Furthermore, if you look at current banking offerings, no major bank is approving loans in U.S. dollars right now.
I absolutely agree that speculation shouldn't be treated as a lifestyle choice; it needs to be phased out of any future economic model, both globally and domestically. However, if you balance the budget and cut taxes, you're essentially forcing yourself to move forward from a position of strength, which isn't exactly speculation. My point is simply that we should temporarily leverage that speculation to our advantage. Since this global speculation will take time to play out, it’ll eventually manifest. When discussing dollar-denominated debt, we are primarily talking about a nation where bond interest is fixed. We've already taken on $1.5 billion in debt at a 6% rate, which looks like a solid deal to me. So, it's doable... We're taking on debt anyway, so why not do it against an inflated dollar? At this stage, the focus isn't so much on Davor Šuker—whose moves are fairly predictable—but rather on the Federal Reserve. The Federal Reserve's actions will dictate how hard we fall. If they pick up a few hundred million dollars in gold, we might actually come out okay.
Gregory Williams7 said:Maria Thomas48: It is impossible for everyone to maintain a constant surplus, just as it is impossible for everyone to remain in a perpetual deficit. The fundamental concept is that total consumption should ideally mirror total production. This balance shifts over time. Today, China might hold a surplus while a nation like Greece runs a deficit, but in five years, those positions could easily flip. The essential point is that the net sum always equals zero. The system is designed to be self-correcting, allowing individuals to maintain their own equilibrium.
Robert Vaughn10: Your vision of the future seems entirely dependent on the inflation of the dollar. We must remember that the dollar remains the world's primary reserve currency; it carries significant weight because people believe in its value, and there is a reason for that confidence. If the major players stopped valuing the dollar, the rest would follow quickly, and the currency would become worthless. That hasn't happened yet. In my view, it would be irresponsible to base an entire government economy on the speculative gamble that the dollar will lose value. I have nothing against Suker taking out loans in dollars—in fact, I much prefer seeing him borrow in dollars rather than euros—but these are still debts that must be repaid! Let them borrow in dollars if the rates are better, but not under the assumption that inflation will magically erase the debt! Every debt eventually comes due.
The irony is that the big players don't actually value the dollar. Look at what's happening under the surface. We're sitting on a $1.5 trillion deficit. Just based on that alone, inflation is going to bleed into the system. The system is incredibly overleveraged because unofficial inflation is already hovering near 10%. 10%! And that's even with all the current deflationary pressures. The Government Inflation rate is at 2.5%, but that doesn't account for food and energy. Do I trust government propaganda or actual reality? We are drowning in debt anyway, and Maria Thomas48 is absolutely right when she says these debts are practically impossible to repay. We simply don't have the substance to settle them. Which brings me back to my point: previous fiscal behavior has been reckless. My plan—which centers on a balanced budget, aggressive tax cuts, buying gold, and borrowing in dollars—would be at the very least better than our current mess. Those loans wouldn't necessarily need to be repaid because bond interest is fixed, which plays right into Saud's hands since they carry the most debt. Just this past March, the US Government took on another $300 billion in debt. Does anyone actually believe that much cash exists, or are we watching monetization in real-time? Look at gas prices at the pump. What happens when oil jumps from $85 to $150 a barrel like it did in 2008? Even at Goldman Sachs, a bank known for its heavy manipulation, they're warning that commodities could see sudden, violent upward swings. On the other hand, the Federal Reserve claims interest rates cannot stay too low for long, which knocked nearly 100 points off the Dow yesterday. So, you have a perfect storm: rising prices—especially food and energy—an impending credit crash, and a government printing massive amounts of paper. The only possible result is a hyperinflationary depression. An unofficial report 😁 also suggests that the only bank in Canada trading gold doesn't actually have the physical bullion in its vaults. It’s gone. Poof. With 10-year bond yields at 4%, we're entering territory that Greenspan himself warned was dangerous for credit markets. Add up what Greenspan, the Federal Reserve, and Goldman Sachs are saying. It doesn't look good. The speculation phase is nearing its end, and we need to be positioned better than we are now. There might be some more maneuvering for perhaps another six months, but the clock is ticking.
Maria Thomas48 said:I finally finished putting together an Excel spreadsheet that acts as a proof of concept for how private sector profits directly link to the government budget deficit. You can grab the file here at ProfitCompany.xls or just head over to my website and find the attachment at the bottom of the page.
The sheet is locked so you can't mess with the fixed revenue numbers, but I left the expenses—those white cells—wide open for you to play with. That way, you can model out a budget that results in either a deficit or a surplus. If you follow the logic used in this specific workbook, you could even build your own xls files with entirely different transaction sets.
Now you can tweak the amounts as much as you want to see how it impacts private sector cash profits. Anyone sitting with a negative balance will end up as a loser if they keep that same sign on their balance. On the flip side, those with a positive balance who maintain it through subsequent periods become profitable entities with actual cash in hand.
I should also mention that the new $500 million credit line taken out by our Government increases the total debt when you factor in the interest costs. According to Suker, that isn't considered additional debt. Sure, it might seem relatively small, but we’ve essentially pushed more debt into the future because we couldn't cover the current installment right now. And honestly, who's to say we won't have more money to pay it off in a year or two? The reality is that repayment installments just keep getting larger every year because the underlying debt itself keeps growing.
Best to everyone.
Given the current balance of power, this isn't even debatable. I emphasized that in my first post here. However, I contend that by shifting policy in response to global conditions, things could turn out quite differently. There is no better situation for a borrower looking to deploy capital than the current position of the dollar. And I have to correct you there—unfortunately, the debt is in euros, and the euro is a less arbitrary currency. Again, it would be ideal to borrow in dollars; while they appear strong as the world reserve currency, they are internally rotten, inflated, and almost certainly destined for collapse within the next 5 to 10 years. Therefore, we should repeatedly borrow in dollars to stimulate the economy and cut taxes as much as possible, hoping the budget fills up sufficiently in the long run. Every lost day means we will struggle to pay it all back later, leading to a massive drop in living standards. Not to mention how disastrous rising gas prices look for our domestic manufacturing. The argument being made is that the dollar is strengthening against the local currency, when in reality, the dollar is weakening—which is becoming evident in the rising prices of oil at $85 per barrel and natural gas. Regardless of whether the exchange rate moves up or down, you still have to pay. At the pump, gas is already $2.75 and has likely been climbing for some time. Instead of focusing entirely on production and aligning everything to support it—to avoid a major decline in living standards—unions are whining about 5% cuts, completely oblivious to the gravity of the long-term outlook. With this current policy, the decline will be closer to 40%.☕ That implies professors might end up with real wages of $1000. Then those same unions will fight to ensure their pay isn't cut by another 5%, acting as if they’ve achieved something monumental...
I am not talking about cash profit—that’s likely where the misunderstanding lies—but profit in a broader sense. People get bogged down in discussions about loans and interest rates, which makes your points hit home for most citizens. There is simply no justification for going into the red and paying a billion dollars in annual interest. My point is this: if this system isn't overhauled, it will collapse. It has to be revised. And once that revision happens, your debt will at least partially be wiped out through one method or another. If things are managed with actual control, there is a much lower chance of being forced to liquidate vital resources, which is what actually matters, not the debt itself. What you can do right now is avoid taking on debt and protect yourself personally; that’s how you make things easier. As for the Government, I’ve already outlined the possible exits; it’s not a one-way street. For instance, borrow a few billion dollars, buy $500 million worth of gold, and balance the budget. There are studies suggesting an ounce of gold could hit $50,000. It’s feasible because all the world's gold could fit in a small briefcase. At that price point, you wipe out the debt. That is when the true nature of debt and this entire system is revealed: the debt and its interest on non-existent money are largely artificial, while real assets are what actually hold value. The only sensible move is to save within the legal framework at every level and use a portion of those accumulated funds for investments.
Maria Thomas48, printing money just devalues currencies, which subsequently degrades our debt since bond interest rates are fixed. You mentioned yourself that debt equals money. Therefore, as money loses value, the debt becomes less "valuable" too. You cannot issue currency without reducing the weight of debt in that specific currency. Since all global currencies are inflating—and given how rapidly the dollar is inflating, to put it mildly—it would be sensible to shift at least a portion of the debt into dollars to wipe it out. Perhaps the Euro could be protected by a higher gold price following the dollar's devaluation. You are far too preoccupied with the national debt. What actually concerns me is that this debt is completely unmanaged. I am much more worried about individual debt and those entities that took on variable interest rates. That is where the core problem lies. To reiterate: if American citizens are paying $1 billion in annual interest alone, they have only themselves to blame, along with the rest of the world. Everyone must answer for their own financial decisions if they expect to manage money reasonably. Change needs to happen at the household level. Every individual needs a sustainable balance sheet, and only then will the system itself become sustainable. I believe you are entirely mistaken in claiming it is impossible for everyone in a community to profit without someone else losing out. It is possible for one party to profit without causing a loss to another. The trick is ensuring that those without solid collateral do not take on debt they cannot repay in cash. If someone lacks the means, they simply shouldn't borrow; that way, they won't end up in the red. This brings us to a harsh truth. If Americans didn't go into debt, banks wouldn't find it so easy to turn a profit unless someone were actively risking capital through investment. For the system to remain viable, we would need an agreement where money isn't just issued, where banks don't charge arbitrary interest, or where interest rates are balanced between savings and loans to sustain both savers and borrowers. This implies creating actual new value, from which only a fraction goes to banks as a service fee. Those incapable of adding value should not be borrowing. The order should be: savings first, then credit expansion, governed by a specific set of agreed-upon rules. Essentially, bailouts and money printing should be banned. That would force everyone to think twice before borrowing or taking a loan. This would lead to a much finer equilibrium in interest rates. Furthermore, if someone does choose to go into debt, they must bear full responsibility for that decision. And if they fail, it's fine. They invested poorly. That is the essence of a market. If you can't afford it, don't borrow. Regarding the current situation, one should start saving immediately at every level and capitalize on the fact that all global currencies are inflating, especially the dollar. Again, your observations are sharp, but your solutions strangely mirror those who advocate for quantitative easing. Once currencies devalue to the point of being worthless wallpaper, even your debt will effectively hit zero.☕ It is essentially the same debate between deflationists and inflationists in the US. Deflationists argue that debts and credits are so massive that no amount of money printing can offset the deflationary pressures. They fail to realize that only real, physical money actually circulates in the system, and increasing that mass inevitably drives up the prices of all asset classes that must still be paid for with paper. Since everyone "must" eat and consume energy, consumption cannot drop significantly; this leads to inflation and relative price increases in food and energy, driving up all costs. When 99% of people can no longer even contemplate certain asset classes, there practically won't be a market left for those assets.😉 The idea that there is no long-term market is unsustainable. So, all you really need to do is change your lifestyle, embrace the principle of saving, and ensure you don't liquidate the very resources that will sustain you in the future.Protecting yourself as an individual is one thing. Regarding the state of the nation, I’ve already laid out how you reverse the trend: stack dollars, buy gold, and wait out the inflation while watching those drowning in debt struggle for air. Since everyone is leveraged, some kind of equilibrium is inevitable—whether you like it or not. The system is already pushed to its breaking point when it comes to everyday Americans.
Maria Thomas48, I unfortunately don't follow your logic. Look, you have to save money. Is it really that hard to grasp the concept that you need to produce more than you consume? There isn't another way. I can't generate profit for someone who lives like that. If a person runs such a massive deficit that they're hemorrhaging $1 billion in interest annually, there’s nothing I can do until they decide to help themselves. If you need to cut the power, cut it. If you need to live on bread and milk to get by, do it. If you need to hold onto last year's textbooks to stay afloat, then do that—whatever it takes to fix your finances. A deficit is simply a deficit; the only cure is a surplus. If you won't accept that reality, then there are no solutions. Sustainable profit requires constant work and, more importantly, a surplus. My ancestors are proof enough of that for me. And that serves as my evidence for point two, which is more than sufficient. All the trouble started the moment people began spending more than they earned. That is the root of the problem, and that is how it must be solved. Period.
Maria Thomas48 said:I don't want to just parrot what you wrote Robert Vaughn10, but it feels like you're sidestepping the question about where a community actually finds its long-term profit drivers.
That’s why I brought it up. Fine. Let's just drop the potential solution for a second and look at the facts. What happens? We can't even reach an agreement on where new capital enters the ecosystem. And we have to realize that any influx of new money—whether it's through credit, exports, foreign investment, or international grants—is basically the indirect engine for profit within a community.
We really need to get on the same page about that first.
It seemed obvious to me that the only way to fund profit is by creating actual value, so I didn't bother replying. And that is the path we need to follow here, using a combination of strategies. Saving, investing those savings, and on the other side of the scale, taking on dollar-denominated debt to buy gold. Saving leads to a drop in GDP, but that is an absolute necessity if you want a proper restructuring. Anything else is just wishful thinking. So, the direct answer to your question is one word: saving. Not some dark cloud theory about running a $7 billion deficit in the current account every month. My ancestors might have been considered stingy by modern standards, but they lived in a surplus and nobody could touch them. The only way to generate profit is through the rule of law, market relations, and creating real value. All these conditions must be met if success is the goal. Printing money isn't a solution, unless it triggers economic growth—though I fail to see why we would even bother printing more money in the first place. Prices would eventually drop, find a new equilibrium, and things would stabilize again. Based on your spreadsheet, points 2, 4, and 5 are the ones to watch. Point 1 is out of the question, and point 3 is something we'd prefer to minimize since it carries high interest rates. The obvious answer is that you must save and consolidate before you can expand. It requires discipline and sacrifice, but the long-term payoff is better because you actually respect what you've earned. What interests me is whether it’s possible to build a permanently stable system. As you noted, growth in China could be temporary if they end up consuming more than they produce, and that ratio will likely shift once exports aren't enough to carry them. But then again, we wouldn't have anything to talk about on this forum...
Gregory Williams7 said:But then we run straight into another issue 🙂 because you're simply performing the exact same action, just in reverse. The end result? An artificial spike in gold prices relative to the dollar—which, given the current trajectory, seems inevitable.
Right now, we're looking at an unnatural state caused by paper gold manipulation, leaving actual gold significantly undervalued. I don't see why one shouldn't have the right to protect themselves from the very things > is warning about. Gold has one key characteristic: you can't just print more of it overnight. Physical gold can't have a "wrong price," which makes it a far more honest medium of exchange. A new monetary system doesn't necessarily have to be gold-backed, but it does need discipline. Of course, that’s exactly what the big bankers hate...