A New Reserve Currency? What Does That Mean?

8/13/2019 A New Reserve Currency? What Does That Mean?

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A New Reserve Currency? What Does That Mean?by Pat Fields, Saturday, Nov. 23, 2013

All the perplexities, confusion and distress in America arise, not from defects in their Constitution or Confederation,

not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation.John Adams

A growing realization that the American banknote is in the throes of imminently losing its status as

the worlds Reserve Currency is reaching critical frequency of discussion and so naturally, what follows

are attempts to assess which other banknote could possibly fill that role in its stead. Most often focused

upon is the Chinese banknote, largely because Chinas government is vigorously striving to use it for

trade on as many occasions as it can negotiate and closing most agreements proffered to that end.

The greatest consternation surrounding this development is of there being insufficient quantities of

renminbi/yuan in the world to assume this role with any realistic efficacy. This is the case with all other

brands of banknotes as well, which lends to the second-most discussed replacement comprising a so-

called basket of banknote brands distributed as notional Special Drawing Rights issued by the

International Monetary Fund.

But Let Us View What Is Kept Unseen BastiatLies and prevarication intended to defraud, always depend on false presumptions, set out in such a

way that theyre left unquestioned and fastidiously dissuaded from examination at every allusion. This isso with the false presumption that a Chinese or IMF banknote ought to be chosen as a replacement for

the American banknote, now that its preeminence is approaching an irreversible end. This is because the

truth lay in the fact that the circulation of banknotes, in and of itself, has caused all the economic and

financial ills our world has so gravely become mired under. Yet, the degree of power and control

enabled by the banknote scheme reaches so deep into societies, that regardless of its self-destructive

nature, its progenitors (governments, bankers and monopoly industrialists) will callously allow that

periodic ruin to spread terrible global deprivation and anguish on humanity nevertheless. To gain a

grasp on how the banknote scheme facilitates such enormous influence, its indispensible to see down

into its core workings.

All banknotes are issued into existence as Loan Principal. No loan can be paid off from Principal,

because Interest service adds to the total due. So, the plain but rarely asked question surfaces where

must the Interest Servicing Funds come from? Its quickly obvious; it can only come from more

borrowing. Thus, the scheme is one where banknotes incur interest, which in turn impels more

banknotes, in a Positive Feedback Loop of co-generation, incrementally growing larger with every

reverberation into infinity. Some suggest issuance of no-interest currency as the cure, but thats

impossible to begin with, and that aspect of the scheme terrifying enough of a specter is shown

below as only its least obscure horror.

Without delving into the historical record of studies done to thoroughly debunk any notions of

virtual money dating back to China in the mid-15thcentury, Ill first suffice to point out that artificially

reproducible trade media like banknotes destroys Price Discovery, affecting every single item in markets

like ripples radiating on a smooth body of water, then reflecting back into a cacophony of chops on the


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whole surface. At length, what appear as market prices, relied upon by entrepreneurs to offer goods,

rather prove misperceptions which bankrupt them. Unpredictable infusions of banknotes cause demand

prices to rise on whims, so this phenomenon comes and goes as mysteriously.

Further, as the exponential progression of automatically inflating currency (whether or not hidden in

banks and equity shares) steadily mushrooms the interest load it incurs, loss of Purchase Power makes

debt service more onerous until all sectors of societies reach a condition of Debt Saturation. This is the

critical juncture where creation of new currency for interest service funding dwindles beyond any

capacity of productive gains from export or domestic consumption fails. In other words, debt

obligations rising on fundamental monetary design alone, inevitably surpass any prayer to out-grow

them. This is so with every banknote issue on our planet. There is no other end but a grand worldwide

default. Thats a fact of mathematics.

What I find to be the most egregious aspect of banknote Transaction Facilitation Instruments, is that

they can not convey Title At Law As In Equity. Common Law (Natural Right and Justice) requires that to

extinguish debt with finality, exchange must be of items offered having similar independently derived

values, possessed in full Title by both respective parties. It isnt ultimately things which we exchange, so

much as uncontestable Titles of Ownership in them. Banknotes, however, are Private Intellectual

Property of their issuer, only loaned to temporary possessors for a fee (interest). Borrowed items can

not command superior Title in things acquired through them, only a legalized right of conditional

possession. Governments get in on the act by their guarantees (of ephemeral numbers) for the right

to demand tax for that service. Thus, I call banknotes Plantation Scrip and identify their purveyors aseconomic Slavers.

So, given that either Chinese banknotes or IMF issued SDRs are inherently evil, ruinous, self-

destructive, enslaving candidates for replacement of American banknotes as our worlds Reserve

Currency, what else presents itself a better nominee with all the ubiquity Chinese banknotes lack or

uncertainty balled up in multi-currency SDRs?

Honest MoneyIn order to circumvent all the inconvenient and despicable effects of the banknote scheme, there is

only one choice which stands far, far above those were encouraged to accept either of which, by the

way, will still lead to generally experienced impoverishment and cruel sacrifice by all but the

government, banking and monopoly industrialist classes, whether disarmingly called capitalist or

collectivist. The only true delineation being Free or Slave, where only Honest Money of circulating

copper, silver and gold (nickel, palladium, platinum and rhodium too, for maximum effect) is conducive

to financial independence in every social level throughout the spectrum, giving each the power to resist

financial oppression by any other group.

1783 American Confederation Copper

For the particular case of the American banknote, at its introduction in 1913, it was measured by 100

cents of copper coin. To date, according to the Bureau of Labor Statistics, its depreciated in Purchase

Power by about 98% (with remarkably similar figures elsewhere, as I understand). As a result, all the


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circulating American banknote units are in true physical terms, and ought rightly be replaced with,

copper coins of approximately 6.5 grams in weight, yielding a handy enough size, issued exclusively as

Coppers by such weight and fineness alone, as the word dollar has become a meaningless jokeand its

application disingenuous anyway. These Coppers would not incur interest on their issue, and therefore

stop the bleeding thats emaciating our countrys productive capacity to honorably extricate itself from

indebtedness and begin to re-build greater capacity to actually grow our economy again because the

absence of this great drain would release capital to rather apply to investment more dependably

placed in a rational environment where both money and goods again stand in a rational symbiosis of

supply-demand. No one would be any richer or poorer, though the interest income flowing from issueand float of banknotes would cease.

Since the Coppers would be pari passu with the present banknotes, all wages, prices and accounts

would practically remain numerically identical, imposing very little disruptive effect on the financial

superstructure everyone is accustomed to. From this environment, a generally agreeable copper-silver

ratio would rapidly emerge, prying silver into the stream of the markets with such a silver-gold ratio to

struggle into existence over a little further time along with others, all probably anchored to their natural

ratios in the earths makeup. No less a genius than Sir Isaac Newton himself, could admit a better basis

than the periodic table.

This path is entirely plausible as it was carried out by the Chinese in 1450 AD at the final collapse of

their flying money. Their resulting copper cash measured in tael-weight, went on to be a principal

coin across the whole of Asia for their rice and dumpling daily needs faithfully serving the Peoples of

that entire region up to 1938 AD.


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If we want fully owned money to acquire fully owned possessions costing nothing more to use

than initial production expense existing in a consistent rational supply-demand relationship to all

other things in markets, resulting in objectively fair and stable prices allowing maximum

independence for people, regardless of station in life conducive to universal trade, where all partners

can deal from a level negotiating ground more ubiquitous than the present Reserve Currency,

sufficient to convert every present banknote unit on earth we need only demand it in no uncertain

terms, with enough determination to make it happen ourselves despite the Slavers opposition.

Paper Rots, Coin Dies Not

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A New Reserve Currency? What Does That Mean?