Bretton Woods v Moneygame
In this world, money is that precious stuff that poor folks perpetually chase, while rich folks play Monopoly with the real thing.
There’s no doubt that everybody needs some of it: money, that is.
Money is a fancified way of saying: Value.
What has real value?
Through the long course of our human history, value has assumed many different forms.
I suppose the first human currency was the stuff of necessity, food and shelter. Which is to say, neanderthally speaking. . . meat, crops, skins, land, shelter.
But as humans began civilizing their life style, we became more sophisticated, more complicated and even more convoluted in our ways of assigning value to everything that’s out there.
As ancient civilizations developed, a significant percentage of the population worked or connived their way into advantageous positions. Some became rich. Many could not climb out of poverty.
Meanwhile, most people got by, whether they prospered or labored.
Those folks who achieved comfort no longer had to chase the coins of the realm because they had devised ways to make the wealth of nations flow unto their cups that runneth over.
Rich folks having plenty of wealth to work with could spend their abundance on beautiful stuff.
Methinks the original “currency” was gold: gold nuggets, gold vessels. Then the authorities that be in any given domain began stamping their identities onto the coins.
And gold, as, well. . you know . . . long story short . . . gold became the precious metal that backed up all currencies, shekels, drachmas, florins, marks, yen, yuan, pesos, pounds, dollars. You know the drill.
Along the way, folks who became accustomed to transferring money among themselves began using promissory notes, checks, cheques, banknotes of all kinds. You know the drill.
In recent times, we’ve arrived at a monetary crossroads where our deal with devil has produced money that has less and less value as the days tick by.
Inflation dictates that our dollars, euros, pesos, shekels, yen, yuan, etc. are worth less and less. That is, you can buy less stuff with the dollar you have this week than what you would have paid last month for the same goods.
Perhaps you have noticed this. How much do you pay to see a movie in a theater nowadays? How much did you pay, back in the day, to see the Lone Ranger, or Superman? How much do you pay nowadays to watch. . . on the big screen. . . Frodo, Skywalker or that Harry kid or the latest Wonder Woman?
Compare the price then to the price now. What do you call it?
Societies have generallly learned how to deal with this devaluating devil.
But only up to a certain point. Sooner or later, the inflation effect has to be dealt with by the powers that be so that the rich can stay rich and the poor can at least have food to eat and a roof over their head.
The strongest currency in the world, the US dollar, is now approaching an “the emperor has no clothes” moment in which too many folks are noticing “the dollar ain’t near what it used to be.”
After the 2008 financial debacle, I had begun noticing, on the Web, that the gold bugs and the sound money guys, the von Mises guys, David Stockman, et al were predicting the demise of the US dollar, or some such earthquake. Some of them, as I remember, mentioned a new kind of world currency in the works that might overtake the almighty dollar.
Well, of course that hasn’t happened.
Today, I noticed on Medium a piece by Tim Denning, who keeps up with such things. His mention of SDR’s (Special Drawing Rights) is the first I have noticed lately.
In his analysis, Tim raises the possibility that those SDRs may soon have their entry into world commerce, and they could overtake the dollar as a means of transferring wealth and value around the world.
Back in 1944, as the Second Big War began to wind down, the powers that be convened in Bretton Woods, New Hampshire. They devised a new system of money for purposes of rebuilding the nations in the wake of the Big War. In that confab they established the US Dollar as the primary determinant of value in what would hopefully become a post-war recovery to normal international commerce and hopefully prosperous exchange of wealth amongst all the nations.
That arrangement is known as the Bretton Woods Agreement. Look it up on Wikipedia.
Meanwhile, today, I had this remembrance from classic Shakespearen tragedy:
In Shakespeare’s Macbeth, the main character — a nobleman of ages past — is issued a mysterious warning by an old woman when she speaks a cryptic omen to him to the effect that his demise would not come until “Birnam Wood should come against (Macbeth’s castle) Dunsinane.”
Lord Macbeth presumed that such a thing could not happen.
But in a later plot twist, a frightened servant reports to Lord Macbeth that, while maintaining his watch of the castle perimeter, he thought he saw the woods of Dunsinane moving. Which was to say. . . enemy soldiers, camouflaged in woods greenery, were approaching the castle, Dunsinane, to attack it.
In our present world drama, we may behold a similar plot unfolding as the earlier agreement of Bretton Woods doth move against the Moneygame.