Alasdair Macleod: Currency Crisis Dead Ahead

This is spoken like a true academic with little to no business world experience.  These are the same types at the fed telling us they have to intervene because without a central bank society would crumble and millions die (sorta like pre 1913 in the US where we just barely made 140 years).  Thank god for the fed, the last 100 years has been incredible for our currency!  I tell you what, make a payroll, run a business, take risk and borrow money to expand your business and then we should talk.  Until then your spouting a lot of nonsense in a sophisticated way to make your argument sound, well, academic.

So I'm guessing you didn't get to the podcast…
Sorry to burst your Randian bubble, no academic here, but I've been making payroll every two weeks now for more than 25 years… 

You said “thank god for the fed, the last 100 years has been incredible for our currency.”. It would have been more appropriate to say “thank god for the fed, the last 100 yeasr as been incredible fot the fed, all their banks and their friends.”. For Mr. And Mrs Middle America, well we have gotten, hmmm let me be nice here, the short straw, bamboozled, used, coned, manipulated and screwed. Not being acedemic here. Also, my crystal ball shows a parallel world without the.fed and it’s not on the verge of collapse.
AK Granny

jcat3022, this is exactly what I mentioned in a previous post about those who live in the world of micro and dismiss macro theory as academic, or worse try to apply micro theory to macro. You might listen to podcast. It's quite good, and it describes many of the pitfalls of just that…applying micro/individual to the macro/mass society. Micro and macro are two very different beasts and therefore require different sets of skills and thinking.Darbikrash gave some very good and needed context to the discussion. Instead of dismissing it, you might go back and do the tedious research of reading where these theories came from and how they evolved over time. Our current predicaments can only be contextualized by having a good understanding of the past, and the only way to do that is to read the past authors on these subjects. My formal training left much of this reading out, which is why in the past couple of years I've returned to many of the original authors. So many of them discuss the same things we are discussing now.
Climber99, where is energy missing from these theories? Built into all these theories is the use of energy, otherwise how do you derive a price/marginal utility/general equilibrium at all. Are these theories flawed? I think so, but it's important to try and understand them, how they came into being, and where they fall short to have a meaningful discussion as to how to transcend them within the context of our predicaments. We need to put ourselves in the shoes of FED members, regulators, and not just blindly dismiss them as evil, that is, if we truly want to have meaningful discussions. If you mean these theories don't include the concept of finite resources in relation to energy, I agree, but you still need to understand these theories because they drive much of the current narratives.
I think it needs to be reiterated that those of us who challenge the ideas in podcasts, articles, interviews, etc. are not attacking Chris, Alasdair, or anyone else. Finding contradictions, discrepancies, and alternative perspectives, helps all of us crystalize our views, but only if we are open to listening.
I find it is in my nature to play devil's advocate for the sake of learning. When I do this, I'm not necessarily expressing my personal beliefs, but I do learn something every time. If all I do is applaud the person and move on, I feel much is lost.
Let's be open to the discussion. Darbikrash gave some wonderful historical context as to why the FED operates the way it does, not necessarily an opinion whether it's right or wrong. DaveF gave some great examples of why debt should be more worrisome than the actual money supply. Hopefully Alasdair reads some of these comments, thinks about them, adjusts some of his views, and writes more. Maybe he doesn't adjust his views at all, but he argues within the context of these challenges next time. Who knows? But in the end we all gain something from the discussion.

john ,
tell me what you have in place to ride this out and i'll enter a discussion with you.

Ferralhen, short of a missile silo, do any of us have a place to ride this out?
I am in a village of less the a thousand people between Kalamazoo and Lake Michigan.  I have been here for about 15 years and I am a member of the village council and the volunteer fire department. I have, food, water, a garden, bees, books, tools, etc.  I think I may have as good chance as anyone of surviving the next 20 years.

South west Michigan is one of the most agriculturally diverse areas in the United States and we literally have more fresh water then we know what to do with. The area is dotted with fruit, vegetable and grain processing and storage facilities. Unfortunately we are within a tank of gas range of Chicago.

What I don't have is military training or combat experience, with a little luck I won't need it.

I think that the great frustration for all of us is the crushing number of variables.

I'm curious to hear what you have to say as I have enjoyed your past posts,

John G

feralhen, you said:

money will someday devalue and I'll add so will the value of human labor.
and jgritter disagreed:
As we move to a situation were electronic financial transactions are impossible and no one will exchange anything for paper currency and there is little or no "money" (gold and silver coins) labor will be the only thing that has value.
I'd have to agree, with one caveat. While it's lovely to look back and think about how we got into this mess (and yes, I'm looking at you, darbikrash) we are here. We need to look forward. Every one of my preps looks toward a world made by hand, where not only my labor but the hand tools of that labor are valued.

"Women's work" has in the past century, to a large extent, been done by appliances fueled by electricity - often electricity provided by fossil fuel use. To the chagrin of some of my more feminist friends, after a crash (if we make it to the other side) Women's Work will perhaps become valued again, and running a household may become full time, honored work as sources of cheap and easy energy fade. For a homemaker, I think an "investment" might be a clothesline and clothespins, a watering can or a basin & pitcher, and of course the tools and seeds of a kitchen garden. You can buy such things, still: everything from hand-looms to flat irons to rug beaters to hand-cranked egg beaters can be found second hand. They still sell cloth diapers. Just getting and making food took the homemaker of a century ago 30 hours a week, not to mention the child-rearing and the cleaning. We don't realize how much time our mechanical servants are saving us, or we won't realize until they are gone. Learn to do things by hand, now, while you still can.  In a hyperinflationary environment in Germany, an uncle of my husband's saw what value women had. If they could prepare food that they grew themselves from storage, irrespective of  the currency crash, they were priceless treasures.

For men, who have 30% more muscle mass, take a hint from the increasingly high cost of even broken farm equipment that can be repaired. Tools matter. Activities like splitting wood and cleaning a chimney, shoeing a horse or plowing with one, hand-shingling a roof or digging a latrine will end up back in your purview, I think.  Keep an eye out for hand saws, hand planes, hand drills. Have several hammers and set aside some nails. Buy a glass cutter and learn to use it, and stock some glass to replace broken windows. The next 20 years will be very different than the last 20. You may not be able to call a repairman. You may BE the repairman. You may not be able to call the police or fire department; along with your neighbors, you'll be them, too.

We can cut out a number of the "crushing variables" by being more self reliant and investing in community, I think.

Velocity of money may be a trigger to watch.  All this stimulus has had some effect but not nearly what it should have.  It's like the central banks are trying to paddle down a stream but the tide is coming in so fast they can't make headway.  Wait until the tide goes out, and they may wish they had been paddling the other way.  If the velocity of money takes off, combined with all this fiat supply, maybe that's when we'll get hyper-expo-mega-whopper-(insert favorite hyperbole, it won't be far off) inflation.
Graph of Velocity of M2 Money Stock