And I don’t mean just Sulfur and brimstone.
(Click here for music ambiance)
So, Earlier today, I was thinking about deficit ceilings and how unsustainable and irrational the various machine-gun quantitative easing that we’ve recently ‘accomplished’ (you know, QE1, 2, 3, 4, 69, 420, 741). Additionally the making money with more debt than money created, really urked me today for some reason.
I’m actually going to work on a quantitative easing article later, but I stumbled upon someone spitting some fire,
That would be Travis Kimmel, President of Real Vision, a really cool org with their own YouTube channel, (also Twitter) about some good finance and stuff and things that are interesting;
Anyways, the twitter is very bearish in a Bear kind of way;
On a side note, it’s thought that some magic mushrooms were able to get the neural synapsis of the berserker stage fired up. The theory is that these warriors took a
hand load Fuck-ton of shrooms and got butt naked and was able to dominate the battlefield as a Berserker impervious to sensory perception of wounds/pain and fueled with unending fury in battles with odds stacked 100 to one. But that’s a discussion for some other day, I may or may not have done a similar Fuck ton of that same shrooms to test that theory out and. *ahem* Anyways,
Here’s the twitter thread that, *looks at notes* Jacked my tits;
Now Here is the copy pasta of the information;
QE, Liquidity Removal, and the Alchemy of Money
I’ve been watching @MetreSteven say stuff like “QE removes liquidity” on here for a while after which people sort of stare blankly or roll their eyes.
Let’s give it one more go, via a traditionally quirky explainer.
At the heart of every monetary system is an act of alchemy.
Let us start by describing this act: the act of monetary creation.
At the center of alchemy lies the Philosopher’s Stone – the prime reagent for money creation.
For a long time this was gold.
For if you had gold, you could lend against it.
From the Philosopher’s stone of gold, we could spawn two things:
- Circulating money
Money and debt are twins, both born of the philosopher’s stone and their fates forever linked.
For you see, there are rules which govern alchemy.
An alchemist is only allowed to create a certain amount of money for each philosopher’s stone.
And the Debt was greater than the Money (due to interest), making the system inherently deflationary.
And this deflationary nature drove the people to want more money in circulation.
So the rules of alchemy were evolved to allow each stone to create more money (fractional reserve banking).
Along the way, many things controlled the ebb and flow of money.
Discovering a cache of Philosopher’s Stones (gold rush!), for example, was rather inflationary in the short term – as it allowed for multiplicative expansion of circulating money via alchemy.
And still, the monetary system evolved.
Today, the system is incredibly modern: the Philosopher’s Stone is no longer a single object (though some still yearn for the simplicity of yore!).
Today, the Stone is many, many things.
Gold is one of them, but not the main one.
US Treasuries are a big one. But so are other forms of “high quality” debt.
In fact, there is a whole array of things populating a roster which makes up the “Philosopher Stone Roster” – these items are weighted by their quality, governed by banking regulation.
And these weightings periodically get adjusted and tuned as we continue to evolve the monetary system.
Many of the old ways persist – for example, the system is still inherently deflationary with debt and money being spawned as twins from the modern Philosopher’s Stones.
But one of the Stones is special: USTs
It has a unique property. For this Stone, in addition to being used as an alchemical debt/money spawning device, can do one more thing: it can be turned — permanently, and irrevocably — into circulating money with no “debt shadow.”
This is dicey business.
It’s a devil’s bargain – only suited to times of great need – but in those times, one may destroy a Philosopher’s Stone and introduce its weight in cash into the economy directly.
When stones are idle (or “excess” due to not being used) it’s tempting
But why do this? Is the Stone not more powerfully additive in its original, multiplicatively potent state?
Yes, it is.
Unless there are no borrowers.
For debt requires willing participants, both the lender and the borrower, and sometimes that match cannot be made.
But in times of crisis, circulating money may be needed (or perceived to be needed) and so the Alchemical Lords – in their infinite wisdom – sacrifice the stones and their future utility in order to meet the cash needs of today.
And this is QE.
It feels inflationary, because of the influx of cash.
But it’s removing alchemical potency from the system, which over time constricts alchemist’s ability to create money from economic activity of lending and borrowing.
It’s an anti-gold-rush.
And the more of it we do, the less potent our monetary creating abilities.
And we become Japan: a nation pushing on strings, to no avail.
Originally tweeted by Travis Kimmel (@coloradotravis) on July 29, 2021.
Here are some things that I want to focus on;
My small little take aways and contribution,
“Debt was greater than the Money (due to interest), making the system inherently deflationary. “
The system is inherently deflationary. Because we print money at a loss. For every dollar made, it’s made charged with interest.
But this itself can be rectified with external influences, but that’s a bit complex in achieving.
I don’t want to go into this right now, because I simply don’t.
But I guess it just depends on the Monetary system not being a monolith, and also accepting ways to recoup its investments in a shadowy type of way, to avoid suspicion and ire of those that deal in such trade of goods and services.
It’s, uh, like-Taxed Sanctioned counterfeiting.
That’s as much hints as I’ll give since it’s manipulatory and in the long run won’t last.
“Today, the Stone is many, many things.
Gold is one of them, but not the main one.
US Treasuries are a big one. But so are other forms of “high quality” debt.”
High valued items and ‘High quality’ debt can be used as the reserve asset, as the ‘Philosopher stone’ so eloquently put.
We used and fucked around and found out (a little) in 2008 with using Mortgage Backed Securities (MBS), treating MBS as a miniature Philosopher stone. MBSs compared to USTs would be akin to Silver compared to Gold. And people were quick to print the fuck out of MBSs, without ever considering that they were mining shitty silver. Fool’s Silver.
Among other not safe bets, speculatory attackers, and predatory loans we tanked the Housing market and created a Great Financial Crises (GFC) of 08. The first phase of things to come.
Speaking of, What’s up with all that Student Loan Debt? Is that akin to Copper waiting for shit to pop again?
What about Medical Debt? Are we going to start trading that too? How many false pretenders do we need to challenge the authority of the USTs?
We also got literal cheese;
And then there’s internet bean coins, but I digress.
What’s cool about some finite intrinsically/extrinsically valued shiny rock (gold) is, it somehow inflates in value simply because the amount of humans/demand rises.
If only we could only use that Red Flowing Proto-Philosopher’s Stone called Vino (or wine. Not Blood) that intrinsically gains value over time. Some sort of accrued store of value proportional to the march of time, to use as a philosopher stone. You know, that way we could technically accrue value to offset interest and make the system inflationary relative to how strong our security and guard of valuable (and accountable) assets are. You know, because if wine breaks it’s value goes to shit. But if any asset is highly guarded, then it becomes even more valuable.
If only we could have some sort of increasingly valuable store of value that requires high security, is scarce, hard to recreate, and means something. If only it was like the number of safe nuclear reactors proportional to their MegaWatt of energy production that we could land lord over seeing as these finite and difficult to engineer feats of human advancement requires society to literally exist and thrive for the sake of perpetuity. Yet are incredibly stringent on the production and safety of such modern marvels.
Maybe we could use spent Uranium ‘waste’ as valuable shiny rock (literally radiating) as the new Rare Reagent to act as the philosopher’s stone. Dat sweet ass Uranium, glowy rock. Almost like these Nuclear Fuel Rods (or better yet, Fuel Cells) are the new Tally stick to monetize off of.
If only. . .
P.S. I’m biased in favor of Nuclear because I was a Nuclear Engineer before getting bored of being a Cult of Fission member. I’m still pro nuclear, just not actively doing anything with it.
“Unless there are no borrowers. “
We’ll run into an issue if there’s more money then there are goods or services.
With the current Corona Virus, a lot of goods and services have slowed down.
Now there’s a lot of people and a lot of “money” (from QE), but not a lot to spend it on.
You know, Inflation. (But that’s not the main thing here).
On top of now issuing negative interest rates, something that others have done, but not the US.
Some bonds are near 0 percent, some bonds are negative. Lmayo.
And now people are pulling the rug of demand from the USTs, simply because they don’t like their investment being devalued from the recent QE and rates and other factors of things I don’t care to know about. Especially since people just look at the price of stonks or gold or other assets becoming a better hedge than USTs, lmayo.
Lots of faith is being lost in some of the markets. Gonna need a place to park that cash.
You can look at ownership data for bonds and such, it tells a different story,
But the market says the opposite so I don’t know.
Disclaimer; I don’t do bonds, I’m a gambler not a Money Lender
“And we become Japan: a nation pushing on strings, to no avail.”
I’m not too familiar with Japan or their Economy, so here’s a wikipedia article that I plan on perusing for info. (probably never, because I don’t know if I care enough about it to investigate).
It was the sort of test run that ‘greenlit’ the Quantitative easing as more than a ‘thought experiment’ but I don’t talk to economists so I don’t know much beyond that.
I Also got banned from a few Economist Circles because they realized I wasn’t a
real Degreed Economist. Lmayo (I’m joking but this really happened).
I guess calling myself an Economist because I hate economies wasn’t something that qualified me. Jeez, what a gate keeper. I guess people who have degrees in Critical Race theory are Racists.
I just wanted to save this little gold nugget of alchemical knowledge, It had a different insight then I had, but I guess that’s the way reflections work.
Now if only I could find someone talking about Money in a Karmic-debt type of way with relationships to the Dao.
I bet one day we’ll use perfect orbs of finite moments in an infinite timeless world to back up our value structure system and become the new philosopher’s stone. Kind of like Digitized NFTs of public Artworks via a format similar to YouTube videos ‘technically’.
Can we start exchanging soul orbs already?
Maybe, or maybe not, it’s a not safe bet.
Nothing is, lmayo.
*Not Valid Financial, Legal, Life, or Any Advice
One thought on “RealVisions’ President is spittin some fire on Quantitative Easing;”
[…] Guess what happens when you print money? Someone owes that money that’s being printed. And if you really looked, the bottom line is we’re fucked if we keep it up. (Here’s a side article on the Alchemy of Quantitative Easing) […]