Volume 9, Issue 13
The coronavirus mandates accelerated change that would have been manifested in the world economy through a normal ten-year cycle, but was collapsed into 18 months. Certain industries will streamline. Others will realign. Even others will cease to exist. The labor market will experience sharp reductions in old line industries and dramatic increases in new technological industries. Job training will be paramount.
Overlooked by some politicians is the struggle, the competition, and the confrontation of currencies vying for supremacy in a new world order. This positioning of mediums of exchange is not just about economic power. The geopolitical objectives at stake create downstream consequences for family values, units of government authority, and, ultimately, cultural definitions.
Historically, in the theater of governments interacting with economic forces, the world’s society finds itself in an economic age. This era is defined by the simple premise that the next great conflict between nations will pivot on an economic scenario. This antagonism may be resolved by military action. Or it may be fought through the boycott of economic trade. Whatever triggers the battle, currency disputes will be a central component of the conflict.
Following World War II, the international economic system was reset to stabilize and enhance economic growth. In that war, there were good guys and bad guys. The good guys won. Allied partners met at the Bretton Woods Conference to agree upon a series of new rules for the post-WWII international monetary system. The United States dollar became the world’s reserve currency. The bad guys had no say in the deliberations. The attendees were of one mind and one purpose. The Marshall Plan to provide funds to finance the rebuilding of Europe was a critical component of the new economic plan.
Covid-19 has laid waste to many countries’ abilities to cope with accelerated change. Debt looms largely over third world countries. The world’s two largest economies, the United States and China, not only compete economically, they compete fundamentally in the way they manage currency and debt. Capitalism, as a demand economic structure, taxes the profits of free enterprise. Communism, as a command economy, dictates prices and taxes economic activity and labor through state ownership and control. The dollar and the Yuan are incompatible as means of joint economic exchange because their value can never be calculated to render a free-floating exchange rate. One system must ultimately be victorious over the other.
Cryptocurrencies and alternative currencies entered the world’s financial markets as mechanisms, largely out of public fear that all sovereign governments were mismanaging their currencies. No currency today is totally tied to the gold standard, meaning that they are fiat.
The debt of sovereign nations, as individual states and collectively, is at an all-time high. The volatility of the true value of a sovereign currency has driven Bitcoin and Ethereum to new highs as calculated in dollar denominations.
These alternative currencies are currently wealth maintenance instruments, like gold. Their objective is to become a true currency tradeable worldwide. The problem is that they have no federal reserve board or other governing body to manage the circulation of the units. They are programmed by mathematical formulas and computer algorithms. They are traded on a cryptocurrency stock exchange. Neither the algorithms nor the stock exchange are sound management tools for the circulation or the valuation of the currency.
What does any of this have to do with an individual’s ability to determine his or her own economic values or pursuit of happiness in the future?
An individual is the unit of authority in determining one’s relationship with God. The family is the unit of authority for values. And, the city is the unit of authority for government policy and economic structure. A state or province is a collection of cities. A nation is a collection of states or provinces. Local authority is critical to an individual’s or family’s free determination of economic destiny. Communism turns that system upside down and strips all authority for pursuit of destiny from the individual, the family, and the city.
Europe is again attempting to broker a new deal. The World Economic Forum headquartered in Davos, Switzerland, and supported by the Exchequers of many European states, is calling for a Great Reset. This includes capital redistribution for a coordinated effort of all sovereign states for a one world objective. Any such top-down government dictated restructuring denies the authority of a city to set its own economic agenda. The result is the elimination of small and family-owned businesses. They will be replaced by partially state-owned conglomerates.
Unlike at Bretton Woods, the good guys and bad guys have not been separated from the system. Competing forces have not been eliminated. China and the United States are not compatible in economic structure or their commitment to cultural freedom. China does not sit in residence on the Executive Committee of the World Economic Forum. However, the fact that Europe leans toward a managed system plays into China’s strategy.
Cryptocurrencies threaten sovereign economic systems. If a cryptocurrency truly became an international means of exchange for commerce across sovereign borders, it would be difficult for nation-states to tax transactions. It is possible in theory that taxes could be paid on a cryptocurrency transaction. However, international tax treaties between nations did not contemplate alternative currencies. International corporations and black-market activities would, in practicality, avoid some taxes. China will never allow this to happen in markets under their control. That is why China is leading all other countries by having issued their own Fed coin.
In the next few years as the world restructures after Covid-19, a world currency will be accepted. It is not only inevitable, but critical to world financial markets. As long as democracy is protected, the US dollar remains the world’s reserve currency, local authority will be respected and families will be facilitated in establishing businesses.
If communism reigns the Yuan becomes the world’s reserve currency, the state objective becomes the priority, local authority is ignored, and a family’s economic freedom will be restricted.
If a non-government cryptocurrency becomes the world’s reserve currency, cultural priorities will be unrecognized principally in economic transactions. Each nation would be forced to yield to the collective accountability of macroeconomic principles. China could not survive under such an economic system, possibly resulting in the flashpoint that could ignite the next military conflict.
The final determination of the recovery currency restructure will place world governments on a path of economic freedom or totalitarianism. We should trust individual freedom, family desires, and local authority.
The lessons of history implore us to remember the success of the Bretton Woods vision. The commitment was for a nation’s sovereignty and cultural identity to be protected for the facilitation of the individual’s own pursuit of his or her own economic destiny.
My name is Marc Nuttle and this is what I believe.
What do you believe?