The economics of Fiat Money proves hearty for Governments, Banks and Financial Markets (for a time), but for regular folks it’s a perpetual blood-letting. Free (Fiat) money is fine and can be made to work, but only so long as its notional/nominal value-in-circulation is attached to some reliable unit. A perfect base for this would be NPO (National Productive Output) which would include domestic agricultural output, domestic construction (at cost), mineral output, oil & gas, raw material, export finished component output, finished factory output and twenty percent of “soft” industry output (e.g., design, IT, product development and financial serves).
Trump’s economic agenda does indeed offer a promising outlook however, measuring the prospects of any possible benefit, based on the expanding value of already overvalued financial markets, remains devoutly optimistic. Identifying the overlying economic conflict and contest that this Nation – like many other – face; the gains are on paper while the losses are quite real.
A more direct example of the problem is illustrated by the economic history of the President’s own enterprise. Massive wealth accumulated in a field known for generating extreme forms of leverage (financing) that can quickly make otherwise ordinary people massive equity positions (well, at least on paper) with much of it, over time, due to spiraling inflation.
Trump, like most people who play the markets, achieve their wealth in two ways: They “play” the markets where demand exists for what they do and where money is made by those – who fund “what they do”, make nearly just as much. The only risk in this game is the occasion where the market collapses before you can pull your profits. Trump’s not done anything illegal mind you and in fact, anyone who owns a home or a car uses the very same financing mechanisms albeit on a much different scale and without the protection of a financial system’s etiquette few have access to.
The Fiat System is built and designed to allow this to happen. It requires perpetual expansion and contraction, new money replacing old money, bad loans replaced by new loans and with it ever perpetual inflation which, in effect, occurs because of the cumulative losses of past excesses. The downside of this scheme is that unless you are positioned to take advantage of the easy-money inflation poisons your economic health with equal persistence.
What’s the point? It will not be sufficient to repeal and replace Obamacare, to fund massive infrastructure improvements and cut taxes to outpace the exponential effects of a Fiat Money/Banking System that operates with absolutely no controls. It will take reconstructing the Banking System, the manner in which we view the responsibilities of the economic system and its obligations to the environment it operates within, its labor pool and the manner in which wealth finds its way to the “demand” side of the economy.
Further, we must move away, as quickly as possible, from our identifying with the contagion known as “capitalism” and on to as pure as possible a market-based economic system where the source of “demand” is the driving force and supply becomes subservient if not outright irrelevant. If this, for example, were to have happened sooner you’d have been driving around hydrogen fuel cell powered vehicles for now going on 40 years and “crude” would be the equivalent to whale-oil and thorium reactors would be providing safe and non-toxic electricity thru a completely redesigned power-grid!
If the President intends, as I believe he does, to bring back a proper and sustainable wage-base suitable for a thriving and upwardly-mobile population then an entirely new perspective will have to be adopted. One that preemptively excludes simply returning 19th Century production back to the Rust-Belt and restricts the application/integration of A.I./Robotics to wealth-creating processes.
There is a near infinite body of regenerative options available for seeding a re-birth of the U.S. Economy and the rewards is but a decision away. Whatever your impressions may be one truth remains: Inflation will not cure what ails this Country.
Curtis C. Greco, Founder