Occam's Gold vs Rube Goldberg's Fiat

Tyler Durden's picture

From the 'simplicity' of a Gold Standard to the 'complexity' of our current fiat system, Santiago Capital draws a handy analogy between the over-complicated machines of 'Rube Goldberg' that represents the interactions between the various actors affecting the size and velocity of our monetary base and the 'simplest possible, but no simpler' world of 'Occam's Razor'-prone gold. In two brief presentations, Brent Johnson introduces the two systems and explains that in order to keep the shark of our economy alive, one of two things must happen: monetary velocity must be maintained or the monetary base must rise. Obviously both are inflationary. From how the system is designed to its drastic implications, simple, brief, concise, and what to do about it.

 

Presentation 1: How The System Is Designed... Introducing Occam's Gold Standard and Goldberg's Fiat system, and the enormity of our credit-based fiat system's liabilities... and how new money enters the system.

 

 

 

Presentation 2: The Reality And Its Implications... What happened after the dot-com bust til now... the Fed plugging the hole... the monetary base has only contracted 8 times YoY in the last 93 years with the last significant contraction occurring 60 years ago... the Fed will not let it fall (or the shark is dead)... from the ramifications of false CPI to the ignorance of facts in the CBO projections, from "it just doesn't happen" to the marginal utility of new debt, there is only one way out for the Fed (and they need to keep it quiet from the masses)...

 

 

Simply put (by Stein) "If something cannot go on forever, it will stop"... whether we decide to do it ourselves or the market does it for us, our over complicated system of money is going to stop...

 

and as such - buy protection against this absolutely certain eventuality.