Bretton Woods 3?

[Barry McCockinner]

I have been fascinated with money for a while now (basically since I learned about bitcoin) and found this twitter thread very interesting. When I say I'm fascinated w/money I mean the concept of money, what that means, why we use it and how it it used in a modern economy. If you're familiar with Bretton Woods your first question is likely when the hell did Bretton Woods 2 happen? It's covered in the thread so I won't spoil it, even though you may guess. 

The world is changing quickly and I'm excited/scared to see how this all plays out. I do think the USD as the world reserve currency is closer to an end than many would like to imagine. I really hope we don't get into a CBDC as they're evil beyond evil IMO. Basically give the government full control and oversight over every transaction you make.

 

 

 

[batman10023]

Freezing the Russian assets was potentially very short sighted.  They did the same with the taliban.  Not sure I agree. 
 

who else could be the reserve currency?

dont you need to run big deficits to be the reserve currency?

[Barry McCockinner]

On 3/12/2022 at 7:44 PM, batman10023 said:

Freezing the Russian assets was potentially very short sighted.  They did the same with the taliban.  Not sure I agree. 
 

who else could be the reserve currency?

dont you need to run big deficits to be the reserve currency?

I think the most likely nation state to replace the US & USD as the global reserve currency is unfortunately, China & the Yuan. They are working on a CBDC right now. A Chinese CBDC as the world reserve currency would be the ultimate dystopian result.

Bitcoin would make an excellent global reserve currency IMO because no one can change the scarcity of it or censor it. 

I don't know what you mean about running big deficits - can you explain?

[kelticwizard]

On 3/12/2022 at 2:05 PM, Barry McCockinner said:

I have been fascinated with money for a while now (basically since I learned about bitcoin) and found this twitter thread very interesting. When I say I'm fascinated w/money I mean the concept of money, what that means, why we use it and how it it used in a modern economy. If you're familiar with Bretton Woods your first question is likely when the hell did Bretton Woods 2 happen? It's covered in the thread so I won't spoil it, even though you may guess. 

The world is changing quickly and I'm excited/scared to see how this all plays out. I do think the USD as the world reserve currency is closer to an end than many would like to imagine. I really hope we don't get into a CBDC as they're evil beyond evil IMO. Basically give the government full control and oversight over every transaction you make.

 

 

 

 

Please note the following statement made by Mark Moss, Barry McCockinner's source for this discussion:

Quote Mark Moss:

Quote

I'm sure most of you are all familiar with the Bretton Woods conference that occurred in 1944 after WW1.

I would be wary of spending to much time contemplating the monetary and social theorizing of a guy who confuses WWI with WWII.   And even if we just write off that as a typo,  who  also thinks that mid 1944 was after  WWII.

[Barry McCockinner]

1 hour ago, kelticwizard said:

 

Please note the following statement made by Mark Moss, Barry McCockinner's source for this discussion:

Quote Mark Moss:

I would be wary of spending to much time contemplating the monetary and social theorizing of a guy who confuses WWI with WWII.   And even if we just write off that as a typo,  who  also thinks that mid 1944 was after  WWII.

The incorrect mention of WW1 is basically irrelevant to the conversation, in fact I don't know why he even bothered to reference it. It is never mentioned again.

The date of the Bretton Woods conference was correct. I mean technically it was after WW1 on the timeline. 

Any thoughts on the actual topic?

 

[Barry McCockinner]

 

[TuscanyTile2]

On 3/14/2022 at 9:02 AM, Barry McCockinner said:

Bitcoin would make an excellent global reserve currency IMO because no one can change the scarcity of it or censor it.

Bitcoin isn't money though.  It has no intrinsic value.  And every bitcoin can be divided into a ton of "Satoshis".  Plus there are thousands of other cryptos competing with BTC. 

Also, do you really think that governments can't take measures against BTC if they want to?  For one, they can say it's just plain illegal to use and then threaten to freeze your assets (a la Trudeau).

Gold and silver are real money and have been for thousands of years.

[Barry McCockinner]

32 minutes ago, TuscanyTile2 said:

Bitcoin isn't money though.  It has no intrinsic value.  And every bitcoin can be divided into a ton of "Satoshis".  Plus there are thousands of other cryptos competing with BTC. 

Also, do you really think that governments can't take measures against BTC if they want to?  For one, they can say it's just plain illegal to use and then threaten to freeze your assets (a la Trudeau).

Gold and silver are real money and have been for thousands of years.

Gold has been the best money for a long period of history. But why?

Many things have been used as money. Gold, silver, fiat, wampam, rai stones, beads, shells, even tulips have all be used as money. We use money because it allows us to exchange goods and services without having to trade cows and goats for cars. Money is what people agree on as a medium of exchange. 

Gold has been the best because it has been the best at the 3 main properties of money.

• medium of exchange
• unit of account
• store of value

Where gold has really set itself apart is that it's basically indestructible and more importantly it's a good store of value. Most commodities fail at the store of value because as the value rises it eventually becomes cost-effective to go dig up more of it. For example there comes a point at which copper becomes so valuable you can go buy the equipment and hire the workers to dig more copper out of the ground and make a bunch of money. People do that and it floods the market thereby decreasing the value. Store of value lost. There are many examples of this type of thing happening with more primitive money like shells and things. Silver fails here a little bit too but it's still 2nd best. Fiat is obviously just super trash due to the ease at which it can be created and debased.

Even gold and silver coins have been debased though - look at what the Romans did with coin clipping that eventually ended up destroying their economy.

The scarcity and difficulty of mining gold has made this impossible to date. Technology may change that at some point, but so far no. 

I think if you look at the three properties of what makes good money you'll agree that bitcoin does in fact make good money. In fact - I would argue that it is better than gold. Other cryptos (sh*t coins) don't compete with bitcoin. Bitcoin was the one that solved the problem of digital scarcity and the network is massive. Others are trash but I don't mind trying to make money on them

I don't really get your complaint about the 8 decimal places on bitcoin. You realize a gold bar can be divided up too, right? The government was only able to stop bitcoin stored on central exchanges. It is censorship resistant if you hold your own private keys. Peer to peer transactions that no one can stop.

The US government made gold illegal to hold in '71.

[TuscanyTile2]

1 hour ago, Barry McCockinner said:

Gold has been the best money for a long period of history. But why?

Many things have been used as money. Gold, silver, fiat, wampam, rai stones, beads, shells, even tulips have all be used as money. We use money because it allows us to exchange goods and services without having to trade cows and goats for cars. Money is what people agree on as a medium of exchange. 

Gold has been the best because it has been the best at the 3 main properties of money.

• medium of exchange
• unit of account
• store of value

Where gold has really set itself apart is that it's basically indestructible and more importantly it's a good store of value. Most commodities fail at the store of value because as the value rises it eventually becomes cost-effective to go dig up more of it. For example there comes a point at which copper becomes so valuable you can go buy the equipment and hire the workers to dig more copper out of the ground and make a bunch of money. People do that and it floods the market thereby decreasing the value. Store of value lost. There are many examples of this type of thing happening with more primitive money like shells and things. Silver fails here a little bit too but it's still 2nd best. Fiat is obviously just super trash due to the ease at which it can be created and debased.

Even gold and silver coins have been debased though - look at what the Romans did with coin clipping that eventually ended up destroying their economy.

The scarcity and difficulty of mining gold has made this impossible to date. Technology may change that at some point, but so far no. 

I think if you look at the three properties of what makes good money you'll agree that bitcoin does in fact make good money. In fact - I would argue that it is better than gold. Other cryptos (sh*t coins) don't compete with bitcoin. Bitcoin was the one that solved the problem of digital scarcity and the network is massive. Others are trash but I don't mind trying to make money on them

I don't really get your complaint about the 8 decimal places on bitcoin. You realize a gold bar can be divided up too, right? The government was only able to stop bitcoin stored on central exchanges. It is censorship resistant if you hold your own private keys. Peer to peer transactions that no one can stop.

The US government made gold illegal to hold in '71.

If you look at American coins like the quarter and dime, which were both made of silver, they added those ridges to the outside of the coins to prevent people from scraping away the silver (since it would be obvious it wasn't an entire coin if those ridges weren't there).  Nickels and pennies weren't made from silver so they don't have those ridges.  Of course, silver has been taken out of all coins since I think 1965.  And even the nickel and penny are made of cheaper materials now.

BTC has no intrinsic value, whereas gold is incredibly valuable.  You're on the right path but you really should read up more on precious metals and be very careful about Crypto (other than as a gamble with money you're willing to lose).

[Barry McCockinner]

1 hour ago, TuscanyTile2 said:

If you look at American coins like the quarter and dime, which were both made of silver, they added those ridges to the outside of the coins to prevent people from scraping away the silver (since it would be obvious it wasn't an entire coin if those ridges weren't there).  Nickels and pennies weren't made from silver so they don't have those ridges.  Of course, silver has been taken out of all coins since I think 1965.  And even the nickel and penny are made of cheaper materials now.

BTC has no intrinsic value, whereas gold is incredibly valuable.  You're on the right path but you really should read up more on precious metals and be very careful about Crypto (other than as a gamble with money you're willing to lose).

I didn't know why coins had those ridges. Makes sense.

Gold is valuable for the reasons I already described. It also has some industrial purpose but the real value is because people have agreed it has value and it has good properties for store of value. You say it's valuable because it has "intrinsic value". Could you maybe define what you mean by that?

I didn't really want this to turn into a bitcoin debate. People mostly have their minds set on that and there is no point is trying to convince them of anything. I guess it's unavoidable given the subject and how I framed it though.

How long do you think the US dollar will continue to maintain it's status as the global reserve currency? I think it's pretty obvious that is on it's last legs and something will have to replace it. They've been abusing that privilege pretty heavily and it's starting to have major consequences globally.

I really hope it's not the Chinese Yuan, or worse, a Chinese CBDC.

 

[TuscanyTile2]

11 minutes ago, Barry McCockinner said:

I didn't know why coins had those ridges. Makes sense.

Gold is valuable for the reasons I already described. It also has some industrial purpose but the real value is because people have agreed it has value and it has good properties for store of value. You say it's valuable because it has "intrinsic value". Could you maybe define what you mean by that?

I didn't really want this to turn into a bitcoin debate. People mostly have their minds set on that and there is no point is trying to convince them of anything. I guess it's unavoidable given the subject and how I framed it though.

How long do you think the US dollar will continue to maintain it's status as the global reserve currency? I think it's pretty obvious that is on it's last legs and something will have to replace it. They've been abusing that privilege pretty heavily and it's starting to have major consequences globally.

I really hope it's not the Chinese Yuan, or worse, a Chinese CBDC.

 

Intrinsic value as in it has real-world uses (unlike BTC) in electronics, dentistry, medicine, aerospace, etc (URL below).  It's known as the "most useful metal".    I don't think the USD is going to be the reserve currency for much longer but it's hard to predict exactly when.  I've heard economists say within the next decade but I don't think it's easy to pin down.  In terms of replacing it, I think there will be a central bank digital currency (I've heard the "SDR") because that would benefit the central planners the most.  They might say "it's backed by a basket of currencies and commodities" but it might just be obfuscation.  The people in power want tight control/monitoring.  They want to be able to pull what Trudeau just did if the people rise up.  Research "social credit score".

https://geology.com/minerals/gold/uses-of-gold.shtml

 

[Barry McCockinner]

53 minutes ago, TuscanyTile2 said:

Intrinsic value as in it has real-world uses (unlike BTC) in electronics, dentistry, medicine, aerospace, etc (URL below).  It's known as the "most useful metal".    I don't think the USD is going to be the reserve currency for much longer but it's hard to predict exactly when.  I've heard economists say within the next decade but I don't think it's easy to pin down.  In terms of replacing it, I think there will be a central bank digital currency (I've heard the "SDR") because that would benefit the central planners the most.  They might say "it's backed by a basket of currencies and commodities" but it might just be obfuscation.  The people in power want tight control/monitoring.  They want to be able to pull what Trudeau just did if the people rise up.  Research "social credit score".

https://geology.com/minerals/gold/uses-of-gold.shtml

 

Aluminum, nickel, lead, iron, steel, zinc and copper are all used far more than gold. Banks aren't buying up gold because people use it in computer parts.

CBDCs would be a dystopian nightmare. I really hope that isn't the path we're heading towards.

[jetstream23]

Check out this podcast.  (And give Lyn a follow if you don’t follow her already)

I’ve held GDX, GDXJ, and GLD since late 2020, but the commodity trade I’ve been most focused on since the end of 2021 is uranium. I’ve been using gold/uranium in both physical (trust) form and the miners to hedge my portfolio. Look at SRUUF and URNM if interested.

It’s not a ton but gold and uranium now comprise almost 5% of my portfolio which is actually a lot. If it grows larger I need to start trimming.

 

@Barry McCockinner
 

[jetstream23]

On 3/19/2022 at 10:40 AM, Barry McCockinner said:

Aluminum, nickel, lead, iron, steel, zinc and copper are all used far more than gold. Banks aren't buying up gold because people use it in computer parts.

CBDCs would be a dystopian nightmare. I really hope that isn't the path we're heading towards.

CBDCs are another means of control... and they're backed by fiat anyway.

Right now you can physically carry around $100 bills with you and the government can't really take it unless by force.  As we've seen now the government can access, confiscate, sanction almost any form of digital money anywhere.  Even BTC has been recovered by the FBI that was stolen by hackers. But CBDCs are the real problem.

Imagine it's the year 2028 and you go to donate money to a crisis center that helps immigrant asylum seekers but your CBDC isn't accepted because the current party in power doesn't want you supporting immigrants from "that particular country."

Imagine it's the year 2029 and you go to fill up your car with gas but your CBDC isn't accepted at the pump because the party in power says you've bought too much fossil fuel this month and your impact on the environment must be limited.

I'd prefer a decentralized BTC over a centralized CBDC any day.

What BTC needs is wider adoption, utility and eventually some serious price stability/predictability.

[jetstream23]

On 3/14/2022 at 6:02 AM, Barry McCockinner said:

I think the most likely nation state to replace the US & USD as the global reserve currency is unfortunately, China & the Yuan. They are working on a CBDC right now. A Chinese CBDC as the world reserve currency would be the ultimate dystopian result.

Bitcoin would make an excellent global reserve currency IMO because no one can change the scarcity of it or censor it. 

I don't know what you mean about running big deficits - can you explain?

This article was from early January, but the hoarding started much earlier than that and certainly months before one of the world's largest wheat producers, Ukraine, was invaded by Russia...

 

[jetstream23]

https://www.agweb.com/markets/pro-farmer-analysis/china-may-be-major-buying-binge-hoarding

[jetstream23]

Read this tweet and then ask yourself a very simple question...

Why is China doing this?

The answer to that question has HUGE implications for the US Dollar as the world's reserve currency, the idea of what determines the value of money, and a potential new world order that has probably been unfolding since 2018 or 2014 (at the latest), but maybe as early as 2008.

 

 

[Barry McCockinner]

29 minutes ago, jetstream23 said:

Read this tweet and then ask yourself a very simple question...

Why is China doing this?

The answer to that question has HUGE implications for the US Dollar as the world's reserve currency, the idea of what determines the value of money, and a potential new world order that has probably been unfolding since 2018 or 2014 (at the latest), but maybe as early as 2008.

 

 

Scary - especially when you have POTUS talking about how there will be food shortages. China is not a friendly country. Them being in control of the world reserve currency would be very bad for everyone. 

I just want to clarify something you said about the FBI recovering stolen BTC. The only way they could do that is if the thieves stored the private keys where the FBI could recover them (in the cloud or something) or if they stored them directly on the exchange. When that happened a lot of people assumed the FBI someone was able to just confiscate any bitcoin they saw fit. That's not the case.

[Barry McCockinner]

 

 

[jetstream23]

3 minutes ago, Barry McCockinner said:

 

 

 

Not great, Barry!