Tructor

The Great Shift: China Rising, U.S. Falling

In general, we are in a dire race with China:
In the US, "jobless recovery" blithely masks ominous social unrest (sales of guns & ammo outstripping all else). Where are the entry-level jobs coming from to re-employ the millions unemployed and the tens of thousands of badly-educated American youth and immigrants?
In China, unspoken/unknown by western economists is the looming disparity between China's newly affluent and vast rural hoardes (half a billion?) who threaten the PRC with real "revolution" or horrendous "population control" methods... Various "5-year plans" have been tried to no avail.
One-sided "carbon caps" will be the final nail in our coffin unless an amazing breakthrough in solar energy or nuclear fusion occurs.
The US Administration doesn't seem to have a clue, other than papering over the past 30 years of stupidity. I can't recall anytime that hyper-inflation ever solved anything.

The Great Shift: China Rising, U.S. Falling

Good work all!
On Unit(s) of Value: There are only two kinds: Units of work - Human effort as labor, innovation, procreation, food, etc and, Units of Inherently valuable tangibles: Gold, oil, coal & other minerals, water, land, air.
Units of energy pre-suppose viable economic systems in which to use it benignly.


On Oct 08 11:01 AM Chris Cook wrote:

> First rate post, Cynicus, and a very high standard of comments to
> follow.
>
> "Ambrose Evans-Pritchard argues that the currency of pricing commodities
> is of no importance, but this is something with which I disagree."
>
>
> Me, too.
>
> Firstly there is a need for a Unit of measure - or Value Standard
> - to be used as a reference point for pricing. It is often pointed
> out that the actual transaction currency is irrelevant - it is what
> happens to the proceeds which matters.
>
> Secondly, there is the requirement for a Unit of currency - a generally
> acceptable tradable token or object redeemable for value, and ideally
> representing a store of value.
>
> These need not be the same.
>
> As John Law said in 1705;
>
> "Money is not the Value FOR which Goods are exchanged, but the Value
> BY which they are exchanged"
>
> The distinction becomes apparent if you look at the Swiss WIR business
> barter/credit clearing system. On the WIR - which is essentially
> just an accounting system - goods and services change hands between
> thousands of Swiss SME businesse on credit terms, and discipline
> in respect of debit balances (ie defaults) is imposed through a charge
> over WIR members' property. This property backing probably accounts
> for the fact that the WIR is still humming away like a Swiss watch
> 75 years after being launched.
>
> The point I am getting to is that no 'fiat' Swiss Francs change hands,
> because all balances are settled in goods and services not FOR Swiss
> Francs (as a currency), but BY REFERENCE TO Swiss Francs as a Value
> Standard.
>
> There is no reason at all why global trade should not be carried
> out within a network of WIR style Credit Clearing Unions, but it
> will be seen that this would require a "Value Standard" which is
> meaningful to the average user.
>
> John Law again:
>
> 'Every thing receives a Value from its use, and the Value is raised,
> according to its Quality, Quantity and Demand.'
>
> I have difficulty in seeing that gold has much in the way of use
> value over time. You cannot live in it, heat your house or fuel your
> car with it, or type emails with it. Perhaps more natural candidates
> for acceptable (fungible) currencies would be Units redeemable in
> land rental value (nationally) and Units redeemable in energy (internationally)
> such as units redeemable in btu's of gas, gasoline and other carbon-based
> fuels/energy vectors in particular.
>
> As for a global Value Standard, it appears to me that a fixed Unit
> of
> energy is the natural candidate.
>
> So to sum up, rather than energy being priced in dollars or renmimbi,
> perhaps dollars and renmimbi might be priced in energy?