The Former World Reserve Currency

It was already bad enough with civilization failing on every imaginable front, too many failing functions to list but including the worst moral failure - genocide. Then, due to mass stupidity, we end up with a double-ended loose cannon wrecking the framework of the largest military empire in history.

"What haunts me is that I am just not smart enough for so many people to be this much stupider than I am." - @KateHarding.bsky.social

A full delineation of the wreckage so far is described on Collapse2050. The massive corruption of the Trump regime is well-documented by shanealmgren.substack. The upcoming attack on the court system, commencing this coming week (March 16-23) is fully described on Joyce Vance’s latest post.

But the real fit has not yet hit the Shan. In my Feb 1st post, Read Trump’s playbook, right here, I had mentioned Stephen Mirin, the economist from Hudbay Minerals and the paper he had prepared, to influence the Trump regime’s monetary policy. He has been nominated to head the Council of Economic Advisors. In an article in the Globe and Mail, March 15, p. B4, writer John Rapley talks about the “Mar-a-Lago Accord” which follows along the same lines as Mirin’s previous paper. This is clever, calling it an “Accord” to make it appear that some other nations have agreed to it. Nobody has agreed to it, but be prepared for when (soon) the Trump regime starts shoving it down other country’s throats. Basically, they have a hare-brained plan to lower the value of the US$ to make America’s exports cheaper. As well, they suffer from the delusion that they can kill off America’s trade deficit with the Rest of the World while still having the US$ as world-reserve currency. This is mindless gibberish.

At the same time, you might be thinking that the wrecking of every US government department is mean-spirited ideology gone awry. While the world’s stupidest person is in charge, others such as Elon Musk (Lone Smuk) do have some brains, and I think they have figure it out. Even at this late date, people still consider the US to be the world’s wealthiest nation. Even the lefties such as Bernie Sanders. For the past 15 years or so, I’ve been saying no, the US is bankrupt. So Smuk is acting like a manager of corporate re-structuring sent in during a private equity takeover of a failing business. But they are doing it all wrong - if you are in dire financial straits you absolutely do not alienate your creditors and destroy whatever value was remaining in your brand, as Paul Krugman illustrates. But Mr. Krugman thinks that the US is not yet into a Greek-style economic meltdown. I disagree because of a long list of items, but will just mention a few here, such as cities collapsing under the burden of their pension liabilities, vast numbers of unproductive people subsisting on entitlements and large numbers of people who are actually not productively contributing to the benefit of society because they work in armaments and military facilities. Note also that Greece wasn’t buoyed by having the world-reserve currency which facilitates the export of debt.

As Mark Twain said: “It is difficult to make predictions, especially about the future,” I will try it anyway. Sometime in the next 10-24 months, USA will either face sovereign default or more likely, Treasury will announce that before a certain date, you will have brought in your existing cash to exchange for a new currency, let’s call it the MAGAbuck. You bring in $100 and get one unit of the new currency. Unclear whether that might be crypto. This (as per design) totally screws other nations holding reserves of US dollars.

Meanwhile, they are working on two fronts. The obvious one, deepest slashing of government spending in every possible way, leaving lives ruined and government departments in shambles, in the crudest and most demeaning way imaginable. The other active front is in permanentizing bond debt. That is all laid out in Stephen Mirin’s paper (noted above) in which they intend to replace short-term bonds with century bonds or even permanent bonds. That means the entity holding that UST (Treasury) bond will never be paid back. Try that trick at your bank! And, on top of that clever ploy, they intend to charge the bond-holder a “fee” for holding that (in)security. In other words, instead of paying the real amount of interest due on a bond (a debt asset), they claw back some of the interest as a “user fee.” Again, try that trick at your bank.

All these actions are a desperate attempt to squeak out from under the massive debt that has accumulated while the US has connived, conquered and borrowed its way to be the supposed Most Wealthy Nation. As with all bubbles, they eventually pop. Instead of keeping the rest of world onside while on their death bed, this regime is alienating and threatening all other nations, as it destroys itself from within.

In an interview with the Globe and Mail Wednesday, March 12, the Bank of Canada governor Tiff Macklem said, “We’ve had our trade spats before. This does not look like a trade spat. I worry that this is something more fundamental, more durable, and that means that our standard of living is going to be on a permanently lower path.”

No kidding! Let that one sink in: “permanently lower path.” That means you, that means starting now. And the best that you can do is end all unnecessary consumption, as per what I’ve been saying for a long time - find a simpler life. This is well-described in a recent post by Charles Hugh Smith, on how to differentiate between waste and surplus. That’s required reading, check it out!