Your point about foreign money buying US assets and then putting the money back into local trading is very profound. The flows from Asia, the Middle East and Europe are colossal. This money has to come from somewhere. They were the result of globalization, the accumulation of dollar assets abroad, or they had to convert their currencies into US dollar assets. This was not taught in any economics, commerce or finance classes in the 1970s. Then, the US economy was still based on manufacturing and the concept of money being taught at the time was still the Federal Reserve and how it managed open market operations. Today, the Fed is competing with so many powers that it cannot do the job for which it was designed, which has been making the money supply elastic across the United States … And forget about international financial flows, which today are so great, their vast team of financial experts cannot Their tracking measure much less.
The money supply and what is taught in schools is the problem. They have these terms for it: M1, M2, M3… when in fact in a debt-based economy, money is debt, not paper. What gives it a utility is the ability to facilitate exchange, but at its core the key is trust in the country issuing it and the citizens who produce the wealth that supports it. Politicians in the United States have worked to destroy currency by constantly misusing it, by spending money without limits, convincing people, there is no cost in doing so as long as the United States fights every war and defends open markets.
I agree with you that the US dollar will be the last man standing. Because every other nation’s currency is simply inferior to it, and the nations that export it do not produce enough wealth to make them consistently competitive in world markets.
reply: I know. People want to argue with me based on what they read in school or what the papers say. I have been taught by my clients. Having been called upon to solve problems around the world, I have been fortunate to see how capital is actually moving. I’ve met with many central banks, the International Monetary Fund has testified before Congress on these topics, and even attended an OPEC meeting. I was called back to China because of the Asian currency crisis. I have been summoned by heads of state and summoned by presidential commissions to investigate malfunctions. I was even asked if I would study at one of the most prestigious universities in the world. I asked why are you asking me? I was told they are “Knowing what they teach doesn’t work.”
Our top clients know this. It probably takes someone as experienced as you to truly understand the global economy and how it really works. We are plagued by Marxist ideas. Every economist thinks it is his job to manipulate society to create a perfect world. Here Larry Summers says you can’t predict the economy and if you could, everyone would follow it and make it so. This is the problem for academics. It’s all theory, not real experience. This is why they accuse me of manipulating the world because if the predictions are correct, it is because I influenced them with our clients.
This is why the bankers told the CFTC that I should be silenced. My case was not simply to seize our model, but to silence our expectations in front of the bankers. They wanted to manipulate the world, and when they lost, it was always my fault. It was only when a customer applied to hire the company to continue its work that the government refused and demanded the source code for the model. They wanted to silence our expectations.