Our Time/Labor Is Finite, But Money Is Infinite
Charles Hugh Smith
https://www.oftwominds.com/blogoct19/money-infinite10-19.html
October 8, 2019
Once we understand this mechanism, we understand that labor can never get ahead.
I’ve been pondering a comment longtime correspondent Drew P. emailed me in response to my post, What’s Holding Up the Market?: “Our time/labor is finite, but money is infinite.” Drew explained that creating new fiat currency and injecting it into a closed system (our financial system) controls and restrains the value of our time and labor, past, present and future.
This is a profound insight into why our financial system is inherently exploitive and why it is unsustainable.
As citizens of Venezuela and other nations have discovered, the power to create infinite sums of currency devalues the fruits of our labor in the past, present and future. As new currency is injected into a stagnating economy, the purchasing power of labor’s earnings declines. The only way to keep from sinking is to borrow money, which siphons off labor’s earnings via debt service to those who get the new fiat currency: the banks, financiers and corporations.
The near-infinite creation of new currency devalues past labor by destroying the value of pensions and savings, devalues the value of today’s labor and of labor’s future earnings.
Labor is stripped of value in two ways: the purchasing power of labor’s earnings are steadily devalued, and much of the remaining earnings are devoted to servicing debt that was taken on to stay afloat financially.
Meanwhile, those receiving the central banks’ free money for financiers can use this new currency (i.e. low-cost credit) to buy up income-producing assets and leverage speculations that reap enormous capital gains, as assets are never allowed to drop in value because “the Fed has our backs.”
And why does “the Fed has our backs”? Because the system implodes once debt and currency creation stop expanding.
Once we understand this mechanism, we understand that labor can never get ahead. No matter how hard one works, or how much one saves, the amount of “money” (fiat currency) that can be created and distributed to those at the top of the wealth-power pyramid will always be near-infinite, and the more credit / debt / currency that’s issued, the greater the loss of labor’s purchasing power.
This simple mechanism–labor is finite but money is infinite–is driving the world’s social, political and financial unraveling. Global debt now totals $246 trillion, a staggering 320% of global GDP, and there is nothing restraining it from climbing to $300 trillion, $400 trillion and $500 trillion, while labor’s earnings are stealthily and relentlessly stripped of purchasing power.
The global debt binge begins anew
Here’s America’s debt binge, rising geometrically in near-infinite expansion:
Here is global debt, a jagged line that moves ever higher:
Drew reminded me that without finite money, i.e. sound money, labor will continue to be enslaved to debt and a steady depreciation of the purchasing power of labor’s earnings.
Thank you, Drew, for reminding me with such an impactful, succinct explanation: “Our time/labor is finite, but money is infinite.”
My proposed solution is a labor-backed cryptocurrency which can only created by labor and only distributed to labor. I outline how this would work in my books A Radically Beneficial World and Money and Work Unchained.
is there enough gold in the world to go back to a gold standard,esp considering how many uses gold now has outside of $ and jewelry?
if not,a basket of “currencies”?
what would make up that basket?
metals?claims on a nation’s output?
i know just enough to ask a few questions but not much more–
These idiots want to replace again a method of measurement. Gold was the only element, metal that never diminishes therefore it was constant and a good measurement. It is limited in supply and hard to acquire. They replaced it with an easy to supply printing machine and now want to replace that, due to globalism and equality, with an easier printing machine. The new will be a basket of: easily gathered nuts, third world currency, and easily produced items from third worlders, like nuts that fell to the ground and takes little effort to acquire, just another form of printing…..or oil from middle east or any other used items that are easy to obtain and diminish, expire, or disappear when used. This way it become hyper inflated and unlike dollars wont be used over and over therefore enriching third worlders….based off production. And when they have to work harder when all the low hanging fruit is gone like third worlders lazy fuckers always do they get drunk and quit and the worlds currency bucket collapses and then they figure another way….asshats.
Tampico, I think that was the question in The Wizard of Oz, whether gold or silver should be the basis of money. Gold is deflationary while silver is expansionary. We went with silver. The question went away with the introduction of fiat currency after Vietnam. Everything accelerated after that, money printing brought about a wealth effect without an improvement in the infrastructure. People have enough income to borrow against fancy cars that they drive in shithole flyover cities full of potholes and pay for shitPhones and Netfucks so they can watch stupid shows like Breaking Wind and The Paisanos.
you mentioned nam,i’ve always heard about the inflationary effects of johnson’s guns/butter & nixon taking us off gold but did you look at the debt chart above 4 the u.s.?
it was still manageable then but today,i don’t know?
Tampa,
Besides the debt you have to add in the 21 trillion missing from two government departments, who knows how many trillions are really ‘missing’?)
Here are four heads of the snake that need to be cut off.
From Hang the Bankers:
The Four Horsemen of Banking (Bank of America, JP Morgan Chase, Citigroup and Wells Fargo) own the Four Horsemen of Oil (Exxon Mobil, Royal Dutch/Shell, BP and Chevron Texaco); in tandem with Deutsche Bank, BNP, Barclays and other European old money behemoths. But their monopoly over the global economy does not end at the edge of the oil patch.
According to company 10K filings to the SEC, the Four Horsemen of Banking are among the top ten stock holders of virtually every Fortune 500 corporation.
So who then are the stockholders in these money center banks?
This information is guarded much more closely. My queries to bank regulatory agencies regarding stock ownership in the top 25 US bank holding companies were given Freedom of Information Act status, before being denied on “national security” grounds. This is rather ironic, since many of the bank’s stockholders reside in Europe.
More snake heads:
One important repository for the wealth of the global oligarchy that owns these bank holding companies is US Trust Corporation – founded in 1853 and now owned by Bank of America. A recent US Trust Corporate Director and Honorary Trustee was Walter Rothschild. Other directors included Daniel Davison of JP Morgan Chase, Richard Tucker of Exxon Mobil, Daniel Roberts of Citigroup and Marshall Schwartz of Morgan Stanley.
J. W. McCallister, an oil industry insider with House of Saud connections, wrote in The Grim Reaper that information he acquired from Saudi bankers cited 80% ownership of the New York Federal Reserve Bank- by far the most powerful Fed branch- by just eight families, four of which reside in the US. They are the Goldman Sachs, Rockefellers, Lehmans and Kuhn Loebs of New York; the Rothschilds of Paris and London; the Warburgs of Hamburg; the Lazards of Paris; and the Israel Moses Seifs of Rome.
CPA Thomas D. Schauf corroborates McCallister’s claims, adding that ten banks control all twelve Federal Reserve Bank branches. He names N.M. Rothschild of London, Rothschild Bank of Berlin, Warburg Bank of Hamburg, Warburg Bank of Amsterdam, Lehman Brothers of New York, Lazard Brothers of Paris, Kuhn Loeb Bank of New York, Israel Moses Seif Bank of Italy, Goldman Sachs of New York and JP Morgan Chase Bank of New York. Schauf lists William Rockefeller, Paul Warburg, Jacob Schiff and James Stillman as individuals who own large shares of the Fed. The Schiffs are insiders at Kuhn Loeb. The Stillmans are Citigroup insiders, who married into the Rockefeller clan at the turn of the century.”
The serpents head is where the buck stops.
Ezekiel 28:15-16 KJB… “Thou wast perfect in thy ways from the day that thou wast created, till iniquity was found in thee. By the multitude of thy merchandise they have filled the midst of thee with violence, and thou hast sinned: therefore I will cast thee as profane out of the mountain of God: and I will destroy thee, O covering cherub, from the midst of the stones of fire.”
And God will cut it off.
If your trying to sound my knowledge of such things, it’s not very deep. I figure the US went broke after Vietnam and Nixon stopped paying other countries dollar redemptions in gold, only scrip. Carter tried to contain the resultant inflation but he lost reelection before we saw the results of his WIN program. Uncle Ronnie got the credit and he ran with it towards financialization of the US economy. We went from producing goods to producing greenbacks. Any country that tries to go to gold or tries to abandon the petro-dollar gets whomped because if the almighty dollar falls, we fall. Like the jarheads say, semper fiat; fiat forever.
Actually it was Gerald Ford, I remember the WIN buttons.
https://en.wikipedia.org/wiki/Whip_inflation_now
Well it looks to me like the dollar is on its last legs as reserve currency Got Gold?
The only system the world is headed to is the electronic currency system. This forces EVERYONE to keep their “money” in computers that can be accessed by TPB and allows them to follow every transaction you make.
The U S $ will be safe as long as the Saud family continues to accept it as payment for oil. That is why we are willing to do whatever it takes to keep the family in power and will spend as much blood and treasure as necessary.
If the USD is ever replaced as the world’s reserve currency, we will become Venezuela on steroids and it will be a great time to be prepared and far away from a big city.
for whatever it’s worth,i saw a headline a couple of days ago,didn’t read the story,but italy is now issuing their debt in dollars instead of euros–
TN
Wouldn’t it be cheaper to simply go to war with Saud and take over the oil?
Yes, but TPTB do not want that to happen.
Businesses are already paying in other than dollars or other national currency. United Airlines Contract of Carriage rule 28 pays in special drawing rights, SDR’s:
Rule 28 Additional Liability Limitations
For the purposes of international carriage governed by the Montreal Convention, the liability rules set out in the Montreal Convention are fully incorporated by reference herein and shall supersede and prevail over any provisions of this tariff which may be inconsistent with those rules.
The Carrier shall be liable under Article 17 of the Warsaw Convention or Montreal Convention, whichever may apply, for recoverable compensatory damages sustained in the case of death or bodily injury of a passenger, as provided in the following paragraphs:
The Carrier shall not be able to exclude or limit its liability for damages not exceeding 113,100 Special Drawing Rights for each passenger.
The Carrier shall not be liable for damages to the extent that they exceed 113,100 Special Drawing Rights for each passenger if the Carrier proves that:
such damage was not due to the negligence or other wrongful act or omission of the Carrier or its servants or agents; or
such damage was solely due to the negligence or other wrongful act or omission of a third party.
So, what is exchange rate of SDR and USD?
I have decided i am now “trans”…..”Trans national”. I figure if for any reason i have law or cops or irs after me i will claim transnational status and i have immunity. For I am sick of working my ass off paying hundreds of thousands in taxes and being called a racist (because i am white), a misogynist (because i am male), elitist (because i save and am frugal). I believe, better yet i FEEL, therefore i AM, an illegal alien and i demand all their protective status and benefits. I declare i am now unfuckingtouchable and do not have to pay taxes.
Most people do not understand money. Money as a means of stored wealth. Imagine you as a human need 24 ounces of water a day to live. Imagine you earn and. Are paid 48 ounces a day for each day worked. If you were to live to age 100 simple math says you need to work 50 years and retire for 50. But what if the ounces of water you saved had say an evaporation rate of 10% per year. That means what you saved 10 years ago is gone. It would incentive you to save only one year. Also forcing you to work 90 years and retire only your last 10. Now who would want you to do that. Maybe the govt is the evaporation cause and they get to tax (steal) some of your water everyday. So every day more the the normal 50 years you work is good for these thief’s in govt. but what if you got paid in something (gold) that will never evaporate, diminish or disappear. What if actually every day your gold actually increased in value. It would allow you to work 30 years and as your sit in retirement your nest egg continues its upward valuations and you can leave any gold to your heirs that is left over. The govt would hate that as they only got to steal from you for 30 years not 50 or 90 and also because you left gold to your heirs the govt will get less from them too. So they enacted, without ever ratifying the income tax and inheritance tax. Now, maybe you understand monetary and fiscal policy more.
mandelbrot,
your comment contains the seeds of what could be a widely read & educational essay,why not expand it?
Tampa, I would have to spend time and effort that I really do not have and rather enjoy that time reading here and just brief comments. In reality I do not feel I am a good writer, as many on here are. Also, I could not weather any unwanted attention, and lastly, unfortunately I feel it would be wasteful use of time as I have nearly given up on society and everyone here allows me that single thread of hope of the future as I find solace in knowing I am not crazy nor alone in my realistic views of what is happening in the world today. If I had not found TBP soon after its inception I am unsure if I would have given up all hope honestly.
I would gladly welcome someone like, Francis Marion, HSC, Zman, Uncola, admin or similar take it up as surely they would so such a better job than me. I would then be happy to fill in some holes with comments., facts, charts if needed. (If I could ever figure out how to use this ipad on TBP to add charts!). In the distant future I will release my second and third books and then maybe be in better position to weather the publicity. The first book, many years ago, was enough for a while.
Perhaps for eternity?
Money is a new form of slavery and distinguished from the old simply by the fact that it is impersonal, there is no human relation between master and slave.
And how would you keep government from stealing your money in a cashless economy?
and w/crypto ,what happens when pg&e has brownouts happening?
Or get cash from the ATM or use a credit card.
I have a bulging mattress.
Come up and see me sometime!
The thing is that even the founding fathers of America knew that debt was slavery. People knew it for hundreds, if not thousands, of years before them. Everyone knows it, and yet here we are.
The rich rules over the poor, And the borrower becomes the lender’s slave. Prov 22-7
Fiat Currency is theft writ large………..
fiat currency is like a store w/the honor system,we leave the store open even when we’re not there,just take what you need & put the $ in the cash register–there’s a large enough % of the population that won’t leave the $ that the concept is unworkable–
currency makes life much easier than having to lug around metal or dust,or having to weigh each transaction–unfortunately,there’s a large enough % of govts & citizens who will not insist upon the metal being in reserve to exchange 4 the currency that it has become a way 4 govt & asset holders to steal from the little guy–
Yes, indeed. Wealth happens when labor is applied to resources – even at the micro level. Want to be rich? Manufacture something people want.
or just counterfeit a trillion dollars a year and lend it to yourself at 0%.
That “what people want” shows one item missing from the headline – intelligent plans.
Labor and land – I can vigorously dig ditches on my property all year long, decade after decade, and have no wealth at the end of it all.
The trick comes when self-appointed elites show up with their brilliant schemes, and want to impose their will.
Let the thinker beware.
Frank
Who said stupid labor?
As the original thought just said labor, that does not exclude stupid labor.
And if you think there are no stupid ideas & people out there, I would question your assumptions.
“Debt is Slavery”
Anyone who has a high school accounting class was taught and understands that.
So, they save, or at the very least, try to adhere to Live Within Your Means.
“Debt: It’s the American Way”
Ahh, but should be prefaced with “Short term, smart debt only”
i.e., use credit when necessary, but pay off the loan obligation as quickly as possible, this avoiding, or minimizing the time spent shackled to debt slavery.
Anyone who has tried to save, has gotten hammered by artificial low interest rates, coupled with inflation.
The easy money offers to the financially ignorant has created to the problem enormously.
Keeping up with the Joneses has proved irresistible to the slaves.
Add in a widespread marketing campaign, via media, and it’s no wonder debt slavery is widespread. All part of the plan.
Being old school saver, and metals advocate is mocked, but when this all blows up, they will be vindicated.
But, as survivors of the debt bomb implosion, they will be targeted for plunder, so a low profile, well defended position will be required.
One possible exception:
If older, with a limited time window left, and in good credit standing, then get revenge by maxing out your credit lines and stiffing the credit – debt slave master vultures.
Your heirs will not be liable, unless estate disbursements can be proven, as eligible funds to recoup by the creditors, if a court judgment rules against the heirs.
Strategy: if you’re planning on leaving something for the wife & kids, gift them up to 10k per year tax free, (currently), and you sail toward the setting sun of a life of toil, earning, and abundance.
If not so abundant, then at the very least inform them your estate is minimal, and prepare them as best you know how, and hopefully, they’ll have strategies in place, to still survive, in the absence of any expected inheritance.
I’ll continue to save, as much as possible, because the alternative just makes no sense to me at all.
Even if inflation eats away more and more of what meager savings have been accumulated up to this point, and projected forward.
Sigh…
Not getting any easier.
“but when this all blows up, they will be vindicated”
If by vindicated you mean that others will realize that having precious metals (gold, silver, lead, etc) is something they want, you would be correct. However, ‘want’ will be converted into ‘need’ which will morph into a ‘right’ and your metals will become community property if you’re not careful.
No, I mean vindicated as savers and wealth preservation via 10% of net worth in metals being the smarter strategy than trusting paper wealth, and owing to debt for material ownership on credit or dead broke due to slavery / insolvency.
But correct, when metal hoarders are known, the will become targets for theft or confiscation, almost certainly.
That’s not vindication, as much as it is a risky, unintended consequence of wise frugality.
With things the way they are now I would say 30-50% in metals makes more sense
I have found that living below your means to be a good lifestyle choice. I am now retired and living off of what I did not spend in my 20’s, 30’s, 40’s and 50’s.
Mouse,
“Anyone who has tried to save, has gotten hammered by artificial low interest rates, coupled with inflation.”
If you go back to 1999 you will find the seeds of the govts monte carlo simulations showing the number of working vs retired and birth rate index were not going to be enough to sustain the govts printing of money. I won’t get into 9/11 conspiracy but it played a role in steamrolling in surveillance and crypto. The end result was to try and bring more in (new tax slaves) from third world as working class tax payers. They forgot to manage the “assimilation” and now we have immigrants with socialistic tendencies infiltrating. Offshoring our manufacturing and labor. They worked against their plans and the govt was too stupid or corrupt politicians were paid to do it. Seemingly the latter.
So, they enacted low rates but needed a 2008 crisis when 9/11 didn’t work. Their goal was to force the stored wealth of seniors and savers back into the economy to be taxed to uphold the govt spending. They needed low rates and inflation. The govt only thinks linear and in averages. Nothing goes up or down in a straight line except the hypothetical charts govt produces. Govts do not know how to save for when the chart lines are inverted. That is the essence of the problem because they learned they have a printing press and can force a linear upward trend. And here we are….the only way out of this is a large enough problem to shoe in crypto so every micro transaction can be taxed outside of illegal barter. Barter in the future will have more prison time than murder. Stored “undiminishible” wealth will be treasonous. Then they will concentrate on non assimilators and force them to eventually assimilate and become more productive. For now they are like unruly children. They will teach them even by force to assimilate and be more productive eventually.
Here’s the old saw (updated for cryptocurrencies):
Gold is the money of kings
Silver is the money of gentlemen
Barter is the money of peasants
Debt is the money of slaves
Crypto is the money of those who place their faith in “wealth” that is completely subject to the availability of artificially produced electricity
The last one is a little long, but you get the idea.
Let’s not forget the American “income tax” which is (erroneously) applied to “wages”. Technically “wages” are not “income” as it is a barter arrangement in which “labor” and “time” are traded for “wages”. There is no “profit” in exchanging one’s “labor” and “time” for “wages”.
I realize that it is an exercise in futility to argue as such in a court of “law” or “tax court”, but in reality, that is the correct definition of “wages” which are not “income”.
True “income” is derived from stocks, bonds, and other financial instruments in which no trade of “labor” and “time” for “wages” is evident. True “income” is derived from “profit”, nothing more.
These are the economic endeavours upon which all of society rests: mining, farming (including timber felling), fishing, manufacturing. That is pretty much it. Every other field are overheads to those, or are service industries. Those 4 fields support all others. Other fields are important to society, but rely upon these 4, such as medicine, and require there be an excess produced so as to be able to exist.
True wealth is created by using/consuming less than what is produced, or charged for services, and accumulating the excess. That excess has historically accumulated in the hands of 1) the ruling class, 2) those most adept at organizing labor, and 3) those that provide a scarce and valuable service to others, and hence who are able to charge fees in excess of their needs. So, to accumulate wealth, you have needed to be part of the ruling class, good at business, or a doctor or lawyer or such. The same remains true today, save for the lunacy in financial activity where parts of society are enriched via the Fed, QE, etc.
Historically, few indeed accumulated wealth. Most had just enough to survive. That has little changed. Of the billions of people on the planet, perhaps 10% have accumulated wealth. Much of the modern system is crazy, as wealth now is also created out of thin air by Feds, QE, etc, . That will end poorly, but the ruling class, the organisers of labor, and the scarce service providers will be fine in the end. Everyone else will be screwed – as has always been the case. Latte servers, laborers on farms, etc. will not generate excess so as to build wealth. Their input is not scarce nor difficult to replace. Others will organize their labor, or tax their labor, and create wealth for themselves. Same as it always was.
Consume less than you earn, and you will accumulate wealth. Keeping it is another story when the system implodes.
What is your reply to Charles Hugh Smith’s proposal in his last sentence?
“My proposed solution is a labor-backed cryptocurrency which can only created by labor and only distributed to labor.”
He wrote a book about it.
Donk – no idea whatsoever. Sounds totally unproductive at first thought. Division of labor is an issue, and how do you compensate the extraordinary folks that are able to organize great things? Maybe he addresses those issues.
When they can see all assets they can make laws to tax excess savings. Crypto makes us slaves. With low rates, inflation, new taxes on “wealth or savings” you must continually work and pay taxes until you die. The goal is to remove “retirement” as even a thought or possibility.
There are many people today getting disability who can work. Surely the future will also allow a protected class to be lazy and “retire” due to some “disability” and receive universal basic income. These protected classes can be found today in LGBTQ, muslims, elites etc. Seems like they are hell bent on a new form of slavery directed at white working males when crypto is enacted. Being a white make will exclude you from obtaining the disability waiver.
That’s a good post Llpoh, but one sentence stands out. “save for the lunacy in financial activity where parts of society are enriched via the Fed, QE, etc.” Unfortunately, that financial activity has been so massive, and so corrupt, combined with information technology it has allowed a cadre of grifters to pretty much sop up the earned wealth of the masses.
“All TRUE wealth is derived from Labor and Land. Everything else is a skim.”
You aren’t the first to see this.
https://www.counter-currents.com/2012/11/two-volumes-by-gottfried-feder/
no true scotsman. change my mind.