The Western Welfare State Globally Is Bankrupt – Central Bank Digital Currencies WILL NOT Save the Cradle to Gave Government Welfare State (Price Discovery) – April 12, 2023,
How do you value Bitcoin without the U.S. dollar? That’s a very serious question to ask if you genuinely believe that cryptos will replace the current fiat central banking-fueled monetary system. The U.S. dollar is derived from what a prior Gold Standard is, currently, as I’m writing this Gold is nearing $2000 USD.
In 1834, the United States fixed the price of gold at $20.67 per ounce, and now the market price of Gold is basically $2000USD per ounce if it weren’t for modern technology, there would be no price DEFLATIONARY mechanisms keeping the price of Gold at $2000USD per ounce.
It should be noted that in order for Franklin Delano Roosevelt known as commonly FDR to jump-start the Welfare State in the United States, he made it more expensive for DOLLAR HOARDERS to purchase Gold using U.S Dollars. In 1933, President Franklin D. Roosevelt nationalized gold bullion and other gold holdings considered money or LEGAL TENDER owned by private citizens from $20.67 to $35 per troy ounce.
Gold Reserve Act Changed the U.S. dollar price in Gold From $20.67 to $35 per troy ounce.
One of the reasons Numismatic gold coins for example sell at a premium is because they weren’t considered legal tender, gold jewelry ext. these other forms of gold ere not NATIONALIZED at this time, and I should point out, that because most U.S. citizens didn’t have gold which is considered a form of WEALTH even to this day, most Americans did not CARE that FDR did this.
This move by FDR for many was considered a means of screwing over the rich, the means by which most government politicians get VOTERS to buy into a stupid idea is by CONVINCING them that only the rich will pay for it.
After FDR, the welfare State of course went bankrupt again, as politicians couldn’t stop promising voters free stuff to get elected and so along comes Richard Nixon and the Gold Shock.
Backing paper money with Gold had fallen out of favor with almost every country on the planet, yes I’m skipping over the Bretton Woods system, which in a nutshell was the United States, Canada, Western European countries, Australia, and Japan deciding the financial world order, which at the time included a gold standard, based on the U.S. dollar.
Personally, I think Bretton Woods was overrated, the U.S. at the time was wiping the floor with other global powers because its free market capitalism economy was far superior to everywhere else in the world.
One of the reasons Switzerland or the Swiss Franc became known as a currency to hoard is because among all developed nations, the Swiss Constitution was the closest to the U.S. and therefore the FEDERAL government in Switzerland was small in comparison to most countries in Europe.
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Cantons are The Equivalent To Provinces and States
How the Swiss economy relates to this post is that a small federal government changes the structure of a welfare state, in Switzerland to this very day you have capitalists and socialists who co-exist primarily because their Federal government doesn’t have the authority to dictate economic policies in every single Canton.
Although the U.S. system is currently being bastardized, the initial attempt by the founding fathers was to keep the FEDERAL government small. In a nutshell a large federal government equates to ONE bad FEDERAL idea being spread among the entire Unite States.
As an example, I’m personally not against a STATE minimum wage, but a FEDERAL minimum wage is extremely problematic, because maybe people in a particular State want to do things differently, and maybe the people of a country want to have the CHOICE TO choose what economic system resonates with them.
If the Federal government makes most of the decisions, especially the economic and financial decisions, and said Federal government is run by a bunch of corrupt idiots who know NOTHING about the economy, civics, finances or maintenance of the nation, a corrupt federal government can destroy the entire nation and they’ll be no way to test other ways of doing things.
Currently in the U.S. California has an emigration problem, California is by far America’s most beautiful State, with the best weather, natural resources, etc. However voters in California have decided to embrace a socialist agenda, which is okay, and so far the results have proven to be disastrous, now if California was the Federal government, there would be now way to escape the economic buffoonery, but because California is only a State, a lot Americans have left the most beautiful State in the union for other U.S. States.
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Voters in a Canton, Province, or State should be allowed to try stupid ideas and live with the consequences, the problem is of course when the Federal government attempts to operate like an authoritarian regime.
The Welfare State is the result of the Federal government getting to big, and now the world is entering a phase in which bankruptcy in the western world is inevitable.
The problem is so bad, that there are calls for a Central Bank Digital Currency. I remind you that the MODERN price discovery was based on a GOLD STANDARD. The U.S. was able to brand itself as having the best monetary system which led to America having the benefit of the global currency reserve.
Gold or barter in general is beloved because of its DECENTRALIZED nature, even if people are in prison, they don’t go to the prison guards or the owners of the prison and ask them to create a monetary system. No, in prison, inmates will create their decentralized own monetary/bartering system to transact in
that excludes prison guards.
Although a lot of people imagine government people as holier than thou, the truth is all governments are corrupt, although the powers that be will take credit for the monetary system, the truth is that PROPERTY RIGHTS are why the current monetary system still stands today.
The U.S. dollar in physical CASH form accepted worldwide is no easy feat, and to save the welfare state the powers that be are imagining phasing out cash and replacing cash with CBDCs, I think they don’t understand how money works.
I’m not one to say that CBDCs can’t be the future, but what I am saying is if that’s the future, not only will economies collapse, but people will figure out or create their own DECENTRALIZED forms of money/barter and why this is a problem is that if it becomes impossible to get people to work hard for CBDCs the financial system will collapse.
In a lot of countries where the local currency is considered trash, a lot of people will NOT work hard for the currency, it’s why a lot of third-world nations remain third-world nations.
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Even when market-friendly politicians lead third-world countries, the people there are so downtrodden and so not trusting of their local currency, that it’s hard for many of them to work hard for it, or even hoard it.
The U.S. is already using sanctions against its POLITICAL enemies as a means to win wars and petty arguments. CBDCs equate to a Kill Switch. In Canada, when their current Prime Minister Justin Trudeau didn’t like the protestors, protesting against his covid19 mandates, he shut off access to their money off.
In Canada, the protestors weren’t even violent, and at no point in time did Justin Trudeau engage in public debate with the protestors. Justin Trudeau was a democratically elected Prime Minister and hen he felt like it, he behaved like a tyrant, confiscating private property.
When FDR nationalized Gold Bullion, that was the government shutting off people’s money supply and deciding what price the government would pay for Gold and then in the future deciding the new much higher U.S. paper value of that same Gold.
Imagine having your Gold confiscated by the government at $20.67 an ounce and then being told you can only buy it back at $35. This happened during a Gold Standard, but at least in a gold standard you could hide your gold bullion, if CBDCs become a reality, the government will know EXACTLY where you money is and be able to confiscate it from you without a court order.
Personally, I don’t think CBDCs will save the welfare state!
Interesting times ahead