Up to our necks in moolah

[Bill Bonner’s Diary]( Up to Our Necks in Moolah By Bill Bonner Friday, July 16, 2021 Liquidity… liquidity everywhere… and not a drop to drink. – The Lament of the Ancient Mariner (adrift on a sea of fake money) [Bill Bonner] YOUGHAL, IRELAND – When the Nixon Administration cut the link between the U.S. dollar and gold, it didn’t write a new chapter in monetary history; it simply repeated a sad, old one. It took the dollar from something natural – a [vernacular money]( developed over thousands of years of trial and error… to something unnatural, established by decree in 1971. Many times have nations experimented with this “fiat” currency. Never, as far as we know, did the story end well. Recommended Link [Will gas lines be coming back?]( [image]( Inflation is on everyone’s mind. Prices are soaring as the economy rebounds, yet there are shortages of supplies. Is the U.S. headed back to the 1970s? To the days of double-digit inflation? Many are concerned, but tech guru Jeff Brown has the answer. He’s found a way for well-informed investors to potentially capture untold wealth in the days ahead with a well-timed investment. [Watch his video here.]( -- Reshaping the Financial System But from the authorities’ point of view, the advantage of this new wampum was that it would give them more “liquidity.” That is, they could print as much of it as they wanted. Since then, the dollar has lost about 85% of its value – compared to the goods and services it is meant to measure. Against its old companion, gold, it has lost 96% of its value. Creating new money can be extremely profitable. So it’s not surprising that others are trying to elbow their way into the trade. The Epoch Times reports: Concerns Surround IMF Plan to Flood World With Liquidity A controversial plan to boost global liquidity means the days of the U.S. dollar being the undisputed king of the international monetary system may be coming to a close, experts told The Epoch Times. The Biden administration-backed International Monetary Fund (IMF) proposal to issue an unprecedented $650 billion U.S. dollars’ worth of new “Special Drawing Rights” (SDRs) this year alone will also help re-shape the international financial system. That is more than twice the total amount of SDRs created by the IMF throughout its entire history. The SDR is a sort of proto-global currency, based on a basket of leading currencies, dubbed an “international reserve asset” by the IMF. In other words, the IMF is taking it upon itself to give the world more of what it least needs – money – exactly when it least needs it, just at the beginning of a major, international inflation. [Featured: Shameful! See What Biden and the Democrats Just Did To YOUR Money]( Problem With Inflation But [the trouble with trouble]( is that it starts as fun. And the fun continues… for a while. People are happy to get the new money. Alas, each new note competes with existing notes for the same goods and services. That’s the problem with inflation – it increases demand without increasing supply. Prices rise. The money – old and new – falls. Those new dollars make the people who get them richer… but leave everybody else worse off than ever. They face rising prices with no extra money to pay them. Recommended Link [Biden’s Next Move Will Catch Most Americans by Surprise]( [image]( In his first week in the White House, President Biden broke all records by signing 19 executive orders… But it’s [this earlier move from a federal agency that will catch most Americans by surprise](. Warning… If you wait until you hear it from the mainstream media, it might be too late for you to take any action. [Click here for the full story]( -- Transforming the Economy But the IMF is not the only one getting in on the “new money” scam. Here’s RTE reporting on Wednesday: The European Central Bank is expected to take the next step towards a “digital euro” today by launching the project’s exploration phase, but questions remain about potential pitfalls and benefits for euro zone citizens. The move comes as the coronavirus pandemic has hastened a shift away from cash, and as central bankers around the world nervously track the rise of private cryptocurrencies like bitcoin. A digital euro would “complement cash, not replace it,” the ECB has stressed. “Complement” is the key word, as in “in addition to.” The ECB has already created almost $4 trillion in new money since January 2020. And ECB chief Christine Lagarde recently told reporters that she has no intention of unplugging the printing press. “As the pandemic passes,” said Ms. Lagarde, “we need to shift the focus from preserving the economy to transforming it. This will require us to redirect spending by both public and private sectors towards the green and digital sectors of the future.” Translation: Forget the coronavirus; we’re not going to stop our money-printing… not as long as we have such great new boondoggles to finance! [Featured: Have a Visa or Mastercard? Get Ready To Shred Them!]( More Liquidity Yes, central banks no longer think their role is to maintain the security of the money system, or to protect the value of the currencies of which they are the custodians, but to use their printing presses for whatever damned fool thing they want. Oh, dear, Dear Reader… we almost swoon, thinking of the glorious future made possible by… more liquidity! All together, central banks and central governments worldwide have flooded the world with some $27 trillion in stimulus since March 2020. And there are still other forms of liquidity coming onstream. Cryptocurrencies, for example. Cryptos claim to be money, too. As they grow in number and value, the flood waters rise. Who knows where the cryptocurrencies will end up? But right now, they are being used as money. If you bought a few bitcoins 10 years ago, for example, you now have a lot more purchasing power… just as if you had earned more money. And now, like the Ahr and Nahma rivers in Germany, cryptos overflow their banks. At last count, the total buying power of the cryptoverse was some $1.3 trillion. Recommended Link [George Gilder: “5G will soon be exposed as hype and hustle.”]( [ad_img]( Gilder believes a radical paradigm change is taking place in the tech world – one that could disrupt the existing 5G industry. It isn’t the first time he’s shocked the tech world… Gilder predicted the smartphone in 1991… identified Amazon in 1998, before it rose 243,000% over 23 years… and helped his followers make 40x their money in less than four years on Qualcom in the late 1990s. Now he’s at it again… [Get his full prediction here.]( -- Drowning in Liquidity Stock market gains, too, represent a flood risk. At the bottom of the 2008-2009 financial crisis, U.S. stocks had a total value under $10 trillion. Now, they’re almost $50 trillion. Are companies really five times as profitable? Of course not. Most of that gain comes from “money”… “liquidity”… benjamins… dinero… moolah that pushes up stock prices – by some $40 trillion. Now, the world is up to its neck in “liquidity.” Next week, we’ll look at how all this money disappears. Hint: It will not be orderly. Stay tuned… Regards, [signature] Bill P.S. Recently, someone offered bitcoin in exchange for one of our lots at our Rancho Santana resort in Nicaragua. The transaction was a bit more complicated… but we were happy to take the “money.” --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=Up to our necks in moolah). --------------------------------------------------------------- FEATURED READS [Skyrocketing Rents Unaffordable for Most Minimum Wage Workers]( finds that affordable renting options are increasingly rare. Only in 218 counties out of 3000 can a minimum-wage renter find something that is within 30% of their income. [Dogecoin Creator Says He Will Not Return to Crypto]( co-creator of dogecoin, Jackson Palmer, explains why he is now passing on cryptocurrency. Palmer criticizes crypto for being run by a powerful pool of wealthy individuals and believes it is financial exploitation for naïve investors. MAILBAG Dear readers talk about credit and inflation. And one has a novel idea for how he’s going to ride out the coming inflation… Jefferson may have said “Never spend money before you have it,” but he lived otherwise. When he died, he owed his creditors over $2 million (in 1826 dollars). He owned some valuable land, but was cash-poor. Of course, he was an ex-president, and they have ways around these things. – Otis G. Could the credit card be the whole problem? I grew up with the principle that, if I wanted to buy something, I worked and saved my money until I could afford it, and then I bought it. As an adult, I hate credit cards and rarely use them. When I do, I pay off the balance every month to avoid interest charges. But I’m in the minority there. Most people use their plastic like it’s free money. How many generations have grown up with credit cards? I think the first credit cards appeared in the 1950s. So the vast majority of people, including the politicians and the yo-yos at the Fed, were breast-fed on the milk o’ the credit card. Maybe that’s why they think they can print endless supplies of funny money with no consequences and spend it like there’s no tomorrow. – Dale A. Like it or not, the shining country on the hill is bankrupt. What is very concerning is the fact that if the giant amounts of money-printing do not continue, we will be faced with a train wreck never seen in this great country’s history. The Fed has no successful endgame. We are beyond the point of any kind of possible fix. And the elected and spineless Congress has absolutely no appetite for addressing or corralling spending. We are leaving our ancestors a horrible-tasting and smelly bowl of soup. My personal solution is to keep a large supply of high-mountain, inky-black, Bonner Wine Partnership Malbec in my cellar, hopefully to ease the pain. – David B. How do you balance spending what you have versus using credit safely? And one reader says he will be drinking the best wine during the projected financial apocalypse… What is your plan? Write us at [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=Up to our necks in moolah). IN CASE YOU MISSED IT… [New “Faceless” Dollar Could Launch in 2021]( A surprising, new version of the U.S. dollar is being readied for launch – and one expert says it could transform the financial system, overnight. [Click here for the surprising story.]( [image]( --------------------------------------------------------------- Get Instant Access Click to read these free reports and automatically sign up for daily research. 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