Changing Dynamics of Global Trade
An existential economic crisis from spoilage of global debt that is having the asset base behind it turn into a swamp is essentially upon us. While professing of the “death” of Petrodollar and it being replaced with Gold or some other aspect ratio will not fix the overall problem. Creation of demand that is solvent without emission of some sort of controlled monetary base that is tied to something else. This is the crux of the matter. Pretending that gold fixing of oil to gold will manifest itself in solvency of the global demand via manifestation of consumers is an illusion. All this does is create a venue, yet another venue which lessens that overall pressure on credit everywhere that has become the be all solution in all matters of commercial and personal exchange.
Imagine for ea moment that almost all future consumption is insolvent because the amount of it has been pulled forward via credit creation is absolute to such a degree that the only way to create it again is to destroy the tie that binds. That may be a solution but everything and everyone involved will not and cannot allow this to happen, since the whole mechanism is integrated into the beneficiary cycle of actors whom cannot and will not be able to adequately adapt to the coming “clearance”.
It is fascinating to look at all sorts of prices that are beginning to come down due to consumer non-participation via inability to bid. As the whole chain shock takes place in supply and production chains there is huge impetus to alleviate it somehow. On the global scale governments will attempt to manipulate the process until it comes unglued and defenestrates those manipulators into the abyss.
Even countries like Russia or Saudi Arabia that have oil production will want to be able to have some sort of creation mechanism for emission that is not tied to a static product. Nor is it viable long term since it will not adequately accommodate technological progress and alleviate the strain necessary for growth mechanisms during the phase of technological implementation cycles.
Here we reach the problem of gold reference point being the be all and end all of the global trade and clearance system. Elasticity during clearance phases of the cycle when the economy is crashing and when it is growing beyond the ability of funds to adequately support its’ growth is nil. Nobody realizes this aspect at all. This will be apparent during phases of conflict since when gold trade stops and countries go to ‘mobilization’ war footing economies there is no inflation since backing of production is implicit by the explicit need present in the country to survive. Ergo, if one takes this aspect and applies it into segmentation of various processes one can understand how certain industries emerge even though no overt funding takes place, yet covertly they exhume that necessity which stimulates their need via mechanisms unseen until they take their place in some meaningful space within the economy. Startups are not these mechanisms since all they do is streamline technological clearance to already existing problem possibilities. However new fundamental metals or energy products or theoretical advances seem to be the vehicles where these things can manifest themselves.
On the cusp of this creation mechanism one can speculate several interesting thoughts. Imagine for a moment that just like with Schrodinger’s Cat where the Cat is simultaneously alive and dead in a single moment of time, we have trade mechanisms tied to a single and infinite exchange mechanisms of some form of clearance be they Petrodollars, Gold Fixed Exchange, Imaginary Money, or some other facilitator. Now for a moment imagine that on the hop from a single clearance mechanism there is a bifurcation into a multitude of various mechanism that is both more stable since the clearance of one mechanism will become elastic towards not its’ availability but its’ desirability and other factors. Ergo a sort of Ferris Wheel with Hub and Spoke Models that is constantly changing shape and direction of those spokes where alleviate pressure on a various sprockets in the turning wheel of trade, growth, and global development.
Be well dear reader.