Wednesday, November 10, 2021

The Contrarian Trade of the Decade: The Dollar Refuses to Die

Which is more valuable: Wall Street's debt/asset bubbles or the global empire? You can't have both, so choose wisely.

The consensus makes sense: the U.S. dollar is doomed because the Federal Reserve and the Treasury will conjure trillions of new dollars out of thin air to prop up the status quo entitlements, monopolies, cartels and debt/asset bubbles, and since little of this issuance actually increases productivity, all it will accomplish is the dilution / devaluation of the currency.

Put simply, the dollar will lose its purchasing power as the inevitable result of the need to print and borrow ever-increasing sums to pay interest on existing debts, fund Bread and Circuses to keep the masses placated and keep inflating the asset bubbles in stocks, housing, bat guano, etc. to maintain the illusion of prosperity.

This destruction of the dollar is TINA writ large: there is no alternative. The only way to keep the status quo from imploding is to print as many trillions as are needed, and this inevitably devalues the currency to the point of worthlessness.

OK, we get it: TINA so the dollar dies. But let's consider TINA from the perspective of the Deep State. Destroying the purchasing power of the dollar destroys the engine of America's power, which is the ability ("exorbitant privilege") to conjure "money" out of thin air and be able to trade this "money" for cobalt, steel, semiconductors, etc. supplied by other nations.

If the dollar is destroyed by over-issuance, then how do we buy the cobalt and other goodies we need to keep the aircraft carriers and all their aircraft in working order? This is a problem, for if we can't conjure "money" out of thin air and persuade everyone it still have value, then America's global influence dissipates into thin air.

So what the consensus proposes as inevitable is financial trickery will destroy America's global influence and its prosperity, and there's no alternative. In other words, the Deep State will just throw up its collective hands and surrender its empire so Wall Street can continue inflating its bubble of phantom wealth, even as that destroys the dollar, America's global empire and ultimately its prosperity.

Is this really inevitable? Isn't it plausible that the Deep State might rouse itself from its various distractions and take notice that once the dollar loses purchasing power, the Deep State loses all its power? Are there really no adults left in the room who can make this basic observation?

For the sake of argument, let's assume there are a few adults left who understand that the dollar is the linchpin of the entire empire and so it's actually worth protecting. And let's also assume these few adults understand that boatloads of parasites, leeches, speculators, etc. will have to be sacrificed, and all manner of politically sacrosanct bubbles, skims, scams, rackets, monopolies and cartels will have to be demolished, much to the dismay of the parasites, leeches, speculators, etc. who have gotten immensely wealthy off these bubbles, skims, scams, rackets, etc.

It seems impossible that the parasites, leeches, speculators, etc. at the top of the heap could be brought down. It's certainly a stretch, given their entrenched power. It seems much more likely that the game of incrementally devaluing the dollar will continue indefinitely.

But what's the endgame of this devaluation? Is it really so far away that the banquet of consequences will never be served? These sorts of things have a way of gathering momentum as self-reinforcing feedbacks kick in, and then the consequences are served up faster than anyone believed possible.

Which is more valuable: Wall Street's debt/asset bubbles or the global empire? You can't have both, so choose wisely.

The contrarian bet is the Deep State finally awakens from its troubled sleep and decides the Empire is more valuable than the bubbles, skims, scams, rackets, etc. and so the dollar will have to be defended regardless of the cost to those benefiting from its devaluation. Very few are willing to take that bet now, but let's get comfortable and watch the printing-borrowing-trillions / devaluation game for a few more years and see how it plays out.




If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

My new book is available! A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet 20% and 15% discounts (Kindle $7, print $17, audiobook now available $17.46)

Read excerpts of the book for free (PDF).

The Story Behind the Book and the Introduction.



Recent Videos/Podcasts:

Keiser Report | The Tragedy of the Treadmill (25:30)

My COVID-19 Pandemic Posts


My recent books:

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).



Become a $1/month patron of my work via patreon.com.




NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Spike T. ($100), for your outrageously generous contribution to this site -- I am greatly honored by your steadfast support and readership.

 

Thank you, Chris B. ($5/month), for your splendidly generous pledge to this site -- I am greatly honored by your support and readership.


Thank you, Michael R. ($50), for your marvelously generous contribution to this site -- I am greatly honored by your steadfast support and readership.

 

Thank you, Rafael A. ($5/month), for your magnificently generous pledge to this site -- I am greatly honored by your steadfast support and readership.

Terms of Service

All content on this blog is provided by Trewe LLC for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information. These terms and conditions of use are subject to change at anytime and without notice.


Our Privacy Policy:


Correspondents' email is strictly confidential. This site does not collect digital data from visitors or distribute cookies. Advertisements served by a third-party advertising network (Investing Channel) may use cookies or collect information from visitors for the purpose of Interest-Based Advertising; if you wish to opt out of Interest-Based Advertising, please go to Opt out of interest-based advertising (The Network Advertising Initiative). If you have other privacy concerns relating to advertisements, please contact advertisers directly. Websites and blog links on the site's blog roll are posted at my discretion.


PRIVACY NOTICE FOR EEA INDIVIDUALS


This section covers disclosures on the General Data Protection Regulation (GDPR) for users residing within EEA only. GDPR replaces the existing Directive 95/46/ec, and aims at harmonizing data protection laws in the EU that are fit for purpose in the digital age. The primary objective of the GDPR is to give citizens back control of their personal data. Please follow the link below to access InvestingChannel’s General Data Protection Notice. https://stg.media.investingchannel.com/gdpr-notice/


Notice of Compliance with The California Consumer Protection Act


This site does not collect digital data from visitors or distribute cookies. Advertisements served by a third-party advertising network (Investing Channel) may use cookies or collect information from visitors for the purpose of Interest-Based Advertising. If you do not want any personal information that may be collected by third-party advertising to be sold, please follow the instructions on this page: Do Not Sell My Personal Information


Regarding Cookies:


This site does not collect digital data from visitors or distribute cookies. Advertisements served by third-party advertising networks such as Investing Channel may use cookies or collect information from visitors for the purpose of Interest-Based Advertising; if you wish to opt out of Interest-Based Advertising, please go to Opt out of interest-based advertising (The Network Advertising Initiative) If you have other privacy concerns relating to advertisements, please contact advertisers directly.


Our Commission Policy:

As an Amazon Associate I earn from qualifying purchases. I also earn a commission on purchases of precious metals via BullionVault. I receive no fees or compensation for any other non-advertising links or content posted on my site.

  © Blogger templates Newspaper III by Ourblogtemplates.com 2008

Back to TOP