digital money has been here for years
you refer to an obscene refinement usage of it
internal to the US Economy is plenty of digital money
FannyMae creation of mortgages, which are used to pay off sellers, or refinancers, who take credits into their savings accounts, then shift money around into checking and brokerage and mutual funds
car loans, which are used to pay dealers, who take credits and cover Detroit costs but also their own payroll costs, so paychecks in Detroit and the local salesroom staff are met, and the circle continues
domestically, this keeps the rivers flowing
but it also allows for each corporation, each household, to load up in a dangerous manner with excessive debts
some would argue that if kept internal, so what?
well, each entity if overloaded with debt will be unable to continue in operations, in investments, and in general foundation building for wealth creation
states, on the other hand, cannot issue digital money
that is why they serve now as the lightning rod for our economic distress
they will be extremely interesting to observe
externally, a whole different story
Asians and Islamics are given tons and tons of dollar credits for our imported products and imported energy supplies
gasoline is bought with credit cards
electronic stuff is bought with credit cards
Asian cars are bought with car loans
they transfer those digital credits into USTBonds and S&P stocks, but on an increasing basis they are buying EuroBonds and GOLD
foreign nation banking reserves are now 76% USTBonds, which is a prescription for DISASTER
building a world banking system on debt-based reserves, then fortifying it with derivative gearing (gold - dollar - TBonds) is lunatic on top of the debt foundation
back in the 1980's, whizboys had the keen idea to create EuroDollars for Arabs and Europeans alike to hold USDollars in bank accounts within their own foreign countries, without need to convert to local currency
thus the EuroDollar was born
Asians have been participating in this for years now
US Multinationals draw on this vast Euro$ pool for loans, as they invest in foreign economies
sounds healthy
but since the USDollar is backed (by default) by $6400 billion in debt, our world monetary system is built on quicksand on every continent
as the Federal Reserve issues evermore digital credits, they pollute the Trez market, the S&P market, the Corporate Bond market, the Mortgage Bond market
Gresham's Law is at work: BAD MONEY PUSHES OUT GOOD MONEY
the reinforcing notion for gold investors, is that many of these credits end up in the hands of irresponsible consumer addicts, who spend money they shouldnt, raid their home equity, and end up filling the Asian exporter Central Banks
and other credits end up directly in foreign hands, who put it directly into their Central Banks
and those CB's are diversifying into gold
so our digital money creation is supporting gold every day
one can still make a valid argument that gold will rise in value, just based upon the increase in money and digital credits floating around
/ jim |
