The Weimar Republic is a famous example of politicians imagining that they have outsmarted economics.
Today the U.S. has ‘the Fed’, which acts as ‘an invisible trillionaire’ to stabilize the economy,
Is it possible, that with a shift to digital currencies soon that the U.S. has finally outsmarted basic economics?
There is always a lot of speculation about the economy, but it's pretty clear what has happened and will happen.
Economics is part art and part science.
The science part can be divided into a few relevant sections.
1) Currency has to be representative of something. It has to symbolize a commodity that has exchange value or it has to try to use military backing to pretend that value, as fiat does.
2) A lot of things in an economy are cyclical. An economy can contract and expand cyclically for climatic reasons for example, or for many other reasons.
The art part cannot be analyzed as easily, arts are not sciences, but looking at the current situation it's clear how the economic sciences are being deliberately used in a way that is a new non repeatable solution to the terminal tailspin the global economy is in.
An economy that is based on a commodity, like gold, has a trustable currency whose reliability is based on the scarcity and utility of that commodity. Gold has uses for which it cannot be replaced, and its supply is limited.
An economy that is based on fiat, like most today, has a trustable currency whose reliability is based on the military ability of its issuing government, and the skill that governments economists have in economic sciences.
A primitive third world government looks at large fiat economies as having currencies based on 'a military commodity', but generally they ignore the second part about economists skilled in economic sciences. If they don't ignore that second part then generally they are toppled by the militaries in the first part of the equation.
So what has developed in the world is a vastly interconnected global economy based on the use of military force to prevent the development of any smaller component economies which use sound economic science.
This seems at first to be mainly a political issue because in a comfortable technological society, economics is political.
However economics also has, unsurprisingly, an economic aspect. In other words, despite all of the fraudulent economics imposed by military force, economic sciences, facts, continue to exist and have not surrendered to any military.
Anybody can look at any major economy in the world today and see that it has been overextended. Emergency measures like outrageous levels of national debt are the norm and are rationalized as part of economic growth. The rationalization though does not hold water if you examine it thoroughly.
For a long time it has been clear that major economies were planning a sort of sneak attack on the global economy by overextending to the point of collapse then retreating to a commodity based economy.
There really is no other path aside from chaos.
With the recent Coronavirus stimulus packages these economies have postponed a collapse but it comes at a great price in terms of economic obligations.
In the past a vast game was played of creating a fictional wealthy entity, like the fed in the U.S., and having that fictional entity act as a benevolent defender of economic stability.
There was no way though to have that fictional entity's actions benefit the non manufacturing side of the economy. In other words the fictional entity gave phantom money to the wealthy without any interest in the non wealthy, a sort of endless controlled descent or deterioration.
The Coronavirus stimulus though is playing out in a different way. There is no urgent recession visible to most people, no vast loss of wealthy corporations etc, so people are starting to wonder why rescue money would flow to the wealthy.
This fact, coupled with the need to immediately jumpstart consumer purchases, is leading to things like 'Coronavirus relief checks' to poor people etc, something that will accelerate soon.
Each time the economy has contracted in the past the government has used a gun in one hand to facilitate giving money to the wealthy with the other hand.
~Although the wealthy consume a lot, they do not consume commodities in a way that inflates them. A billionaire won’t consume a million times more food than a poor person, and they will generally calibrate their commodity holdings e.g. gold etc, to match the ‘outside economy’ i.e., the common economy that is more real than the parallel ‘billionaire economy’ created by Fed financial trickery.~
This time though both hands are shoveling money and the gun is pointed at the government. In other words the next 'contraction', which was to be horrendous, has been converted to a future inflationary event.
So the major economies have bought a little time, but the cost was a solution in which inflation is going to be a freight train rather than a breeze.
What is the solution?
Very simple, convert the inflated currency from fiat to a newly inflated commodity, an artistic step using economic science.
The obvious choice is metals like gold. That has always worked and always will work. It would create some unevenness across borders but it would lead to stability. The perceived downside would be environmental problems from private mining and a reduction in central authority.
A newly available solution is digital currency.
The big flaw in this is the widespread trust in flawed cryptography, which implies yet another in the long series of financial traps less developed economies have been caught in.
No existing digital currency would work as a global commodity. Trashy coins with fast emission curves, like bitcoin, have familiarized people with digital currencies, but they are not suitable for a global economy.
Metals may be used temporarily to bridge the global economy past collapse from inflation, but ultimately the best commodity to underlay a currency is the commodity produced by human input ai coins designed to develop sciences.
No fictional manufacturing growth needs to be 'allowed' by inflation in this kind of digital currency, since the currency actually creates a commodity, and not just any commodity, but the specific commodity that is needed immediately for a wide range of issues i.e. development of sciences.