[caust1c]

I watched this video yesterday corroborating this story and I gotta say the evidence is pretty hard to refute:

https://www.youtube.com/watch?v=7ws8Grsc4jU

Purposefully devaluing the dollar to make US goods more globally marketable and hide the Japanese debt crisis is an interesting but risky strategy.

Currently, I'm glad to see a correction without panic, but it's too early to make a call on the effect on the overall global economy. Xi's already suggested making the Yuan a global reserve currency, and seeing as much debt they're holding, I'm a little worried they're able to make it happen if this is the US financial strategy.

[avensec]

The channel appears to be five years of "It is happening!" and "It started!" thumbnails. I just can't take it seriously, so I decided to look into the company/leadership.

It appears they've been associated with a lot of hype/fear copy-paste companies that offer highly inflated monthly access to their trades and research. Note that they were named "Game of Trades" before rebranding.

[johnvanommen]

> It appears they've been associated with a lot of hype/fear copy-paste companies that offer highly inflated monthly access to their trades and research. Note that they were named "Game of Trades" before rebranding.

I really wish that people would wake up to the danger posed by meme stock BS “leaking” into the general markets.

Just as voters are responsible for changes in society, uninformed investors can impact society too, especially when they’re amplifying their purchasing power via leverage.

For instance, I’ve been buying real estate forever, and I’ve enjoyed the Reventure app.

But I’ve REALLY noticed that his YT videos are exclusively doom and gloom.

This ceaseless negativity moves markets, just as the irrational exuberance for real estate in 2005 moved markets.

But the exuberance for real estate was driven by people who were buying real estate.

The endless doom and gloom of YT finance videos is for a much different reason:

It drives page views.

That’s not a good thing. Because it’s really easy to get swept up in the negativity. And that negativity has a downstream effect, where it’s often used to convince people to invest in things that the YouTuber is promoting.

Basically, I don’t know if we need an “SEC for YouTube,” but we might.

Yes, I know we already have an SEC for YouTube (it’s the SEC), but nearly none of the people doling out financial advice on YT are trained professionals. It’s the fundamental defect of internet advice; who to trust?

[sporadicism]

> his YT videos are exclusively doom and gloom

Why do you suppose that is? Why is there an insatiable desire for negative news about real estate?

[zbentley]

Misinformation and mass hysteria suck, I agree. But if the amplification of the sky-is-falling-flavor-of-the-week braindead youtuber take can materially imperil financial markets, the stability of that system was always doomed.

An “SEC for YouTube” can’t prevent shit if the lever of influence is already that long. It might be able to keep a lot of meme investor idiots from losing their shirts, but that has to be weighed against the historically evident risks of having what amounts to a ministry of truth/state propaganda regulator.

[AnimalMuppet]

I remember sky-is-falling-flavor-of-the-week newsletters from the 1970s; they probably go back further than that, but I don't remember firsthand. The difference is that YouTube lets millions of people find this without either having to subscribe to the newsletter, or the newsletter having to figure out who they are and send them a free copy.

In other words, what's different is that the gain is higher. The system was not always doomed, because the gain wasn't this high. Now that it is this high, the system may now be doomed.

[johnvanommen]

Great summary.

Art Bell is another one:

He was on at one in the morning, and a big chunk of his audience was calling in to the show drunk or high. 99% of the audience knew it was fake.

And twenty years later, the conspiracy stories live on, via YouTube, but without the CONTEXT that the Art Bell show was broadcasting to a VERY niche audience.

[aurareturn]

  The channel appears to be five years of "It is happening!" and "It started!" thumbnails. I just can't take it seriously, so I decided to look into the company/leadership.

Reminds me of ZeroHedge. They've been shouting that the depresssion-level market crash is near now since 2009. Every single day. For 17 years.

[attila-lendvai]

i don't think that's a fair representation of the average of the ZH articles.

many bird's eye view articles are depicting how the game is rigged and corrupt to the core and that it is heading towards a wall (and you should buy x, typically gold)... yes.

but then they also have more day-to-day articles discussing market moves and predictions in all directions.

ZH is a wider range of stuff than that. and in all that noise, most of the important alternative, often initially censored news appeared there first.

so, yeah, don't take it all in literally... but then it's a site edited by Tyler Durden FFS... :)

[aurareturn]

Maybe they've changed a bit. I remember reading them in 2012 - 2014. All doom articles. The message was clear that the ultimate market crash was near.

[no_wizard]

I can only personally speak for myself and I'm not giving financial advice here. I use the Bolgehead strategy of the 3 fund portfolio is still the tried and true I follow, and I have yet to not benefit from doing so, even in economic downturns[0]

[0]: https://www.bogleheads.org

[drakythe]

I'm immediately concerned with the note about silver dropping so much. Yes, that happened, and was a historic drop. But it followed a historic run up to its prior price, so the drop is still net positive for even a 1 month period.

I'm not saying the article's thesis is incorrect, but its providing some data without context. I'm always leery of data presented without context.

[coffeebeqn]

I take “not financial advice” articles like this at best as entertainment. How can anyone seriously talk about metals for example without mentioning that gold was $1900 and silver $20 a few years ago. Today they sit at $5000 and $80. It’s completely absurd to write about the “drop” as a proof of anything

[attila-lendvai]

this article discusses the events in the recent couple of months, explicitly. the moves prior to that is not really relevant for its thesis -- regardless of how true it actually is.

[UltraSane]

The Yuan is never going to be a global reserve currency with how opaque the CCP is.

[bloppe]

The bar has been significantly lowered in the last year since the US has decided to commit bigly to unpredictability. Another 3 years of these kinds of manipulations and the Yuan could very well look like the lesser evil to a lot of countries.

[XorNot]

The Euro is like, right there? Its a market larger then the US.

[vachina]

Europeans dont make stuff i want to buy.

[XorNot]

Neither does the US that's not the utility of a reserve currency.

[throw0101a]

> The bar has been significantly lowered in the last year since the US has decided to commit bigly to unpredictability.

The yuan/renminbi is currently about 8.5% of all foreign currency transactions. That's on a similar to CAD and AUD (6%):

* https://en.wikipedia.org/wiki/Template:Most_traded_currencie...

It has a ways to go still.

[UltraSane]

Still nowhere near what the CCP does.

[marcosdumay]

The Yuan already is a popular reserve currency.

What is this crazy idea that every single country must act all the time in the same simplified way?

[UltraSane]

The Yuan is not a popular reserve currency. It has less than 2% of share vs 57% for the USD.

[tastyfreeze]

The first currency to be gold backed will take the crown. China appears to be building towards that end.

[unethical_ban]

I don't understand why gold-backing is required. I'm a novice.

My understanding is that a reserve currency requires fluid markets and a stable, reliable, metrics-based currency policy. It's why the Fed is so stubborn about its relatively simple policy goals: 2% inflation and low unemployment.

[tastyfreeze]

Partially gold backed reduces counter-party risk. Fully gold backed, and exchangeable, eliminates counter-party risk.

China appears to be attempting to reproduce what the USD was before it was free floating.

USD is currently backed by debt and nominally military might. If the US defaults then all of the US bonds held by foreign banks become worthless. That is an enormous risk which is why countries have been divesting from US bonds. If USD was still gold, as it was before 1913, if you hold your money it cannot be made worthless by a third party. After 1913 USD became gold backed bills with partial reserve. It is why USD became the global reserve currency. But, reserve requirements were reduced and more paper was produced. In 1971 Nixon removed the convertibility of paper bills to gold metal effectively stealing the gold of any nation that asked the US to hold it.

One of my favorite bits of currency trivia is that a $20 double gold eagle coin used in circulation prior to 1933 had a gold content of 0.9675 troy ounces. Twenty dollars in your hand was literally nearly an ounce of gold.

[PaulDavisThe1st]

This simplistic explanation seems to elide the very point it makes ... a gold backed currency becoming a non-gold backed currency was done via a political decision making process, just as any decision to default on US national debt would be.

You seem to suggest that people should worry about a default claiming if we had still had a gold backed currency the risk would go away ... "if you hold your money it cannot be made worthless by a third party" ... but it can be made worthless by a government any time that government chooses.

The government (having defaulted on gold-backed debt) could simply refuse to convert the paper of the debt to gold (sure, that would be bad, but hey, they've already chosen to default, so not much worse ...)

[attila-lendvai]

the timeframe of losing the gold backing is typically measured in decades, while reserve currencies are used in a day-to-day basis.

[tastyfreeze]

Oh no! You have found the fatal flaw of using paper currency backed by anything. Before 1913 money was gold and silver. Not paper bills backed by those metals.

Many people doubt that returning to gold and silver coinage is possible. Going to gold backed currency is a step in the right direction.

A full reserve requirement might work for paper currency. But the only way the plebs that are stuck with paper can truly secure their wealth is to use metal the same as countries do.

[PassingClouds]

Looks like the BRICS initiative is building towards this with an August announcement. But until it happens, this is still in rumor territory.

https://bmg-group.com/russia-confirms-brics-will-create-gold...

[throw0101a]

A semi-joke-y take on BRICS:

> Pretty straightforward really. You combine Brazil's history of monetary stability, with Russia's respect for property rights, India's domestic tranquility, China's financial transparency, and South Africa's investment opportunities - and hey presto, you've got a new global money

* https://twitter.com/davidfrum/status/1665053372402081792

Of course more countries may enrol in the system, but that dilutes the influence of the five namesake nations of BRICS.

But then you have to choose an actual currency(s) to do transactions in, so will you trust them to be stable? Or perhaps go with a 'theoretical' currency likes Keynes' bancor?

* https://en.wikipedia.org/wiki/Bancor

* https://en.wikipedia.org/wiki/World_currency#Single_world_cu...

As for gold-based currencies, see perhaps "Why the Gold Standard Is the World's Worst Economic Idea, in 2 Charts":

* http://archive.is/https://www.theatlantic.com/business/archi...

* https://www.moneyandbanking.com/commentary/2016/12/14/why-a-...

[UltraSane]

Who stores the gold? Who audits the gold? Who trusts the audits? It isn't hard to wrap gold around tungsten.

[tastyfreeze]

All reasons that a paper currency backed by gold has never lasted long. Going to paper currency is the first step to start cheating by fudging numbers. The only money that has ever lasted is actual coins/bars of metal, precious or otherwise.

[PaulDavisThe1st]

> The only money that has ever lasted is actual coins/bars of metal, precious or otherwise.

1. most physical paper has a relatively short life, so one would not expect it to last as long as metal tokens

2. paper was only available in much of the world several thousand years after the first currencies began, so it's not suprising that we have little record of paper money from very old civilizations.

3. the idea that there was no cheating by fudging numbers before paper currency is completely ahistorical. The nature and ease of the fudging may have changed, but the fudging itself existed long, long before paper currencies became common.

[UltraSane]

Even coins were shaved and debased.

[XorNot]

The entire reason coinage was even a thing was exactly this! Turns out it's pretty hard to know if a coin is actually the amount of gold it represents, if the shopkeepers scales are accurate etc etc. etc

The entire concept of marking coins with trustworthy seals was exactly to basically invent fiat currency as risk mitigation: coins bearing the seal would be honored, and from that it was a short hop to "what if I just presented an IOU with the seal of the local gold merchant?"

[lkey]

DO NOT make financial decisions based on the advice of a youtube channel. DO NOT make financial decisions based of of the advice of an an article written by a know associate of Curtis Yarvin. You saw the video yesterday because this is a marketing exercise. They hold a stake in the outcome, you are the greater fool.

Christ.

Find a professional fiduciary that doesn't have a youtube channel and never speculate more than you can afford to lose.

[maleldil]

For the unaware:

> Curtis Guy Yarvin (born 1973), also known by the pen name Mencius Moldbug, is an American far-right political blogger and software developer. He is known, along with accelerationist philosopher Nick Land, for founding the anti-egalitarian and anti-democratic philosophical movement known as the Dark Enlightenment or neo-reactionary movement (NRx).

The author (jart, Justine Tunney) has openly supported these ideas: https://thebaffler.com/latest/mouthbreathing-machiavellis

[eudamoniac]

What does this have to do with the merit of his associates' financial advice?

[maleldil]

Don't think about the "financial advice" in isolation. Think of the incentives. Why did they write this post?

[lovich]

Oh so they’re a cryptofascist, for both senses of the word crypto

[maleldil]

If one of those meanings is "one who hides their support for fascism", it doesn't apply, as they've made public displays of support. It's just that most people know them for their technical accomplishments without doing further research on who they are. This is understandable, hence my warning.

[lovich]

Everyone in the IDW or who followed Mencius moldbug always told normies they weren’t fascist and that you just called them Nazis because you disagreed with them until the current day when they are now more open about being in what they consider a post Constitutional era.

That’s why they were called cryptofascists even though I agree they’ve dropped the hidden part since they feel they have the power to get away with it.

[pjc50]

This really should be pinned to the top of the thread. Finance-as-entertainment is the world's worst gatcha game. For some reason people love getting suckered by these far right idols, both financially and "intellectually", who in turn are playing three-card-monte with them.

[pjc50]

Everyone forgetting the more likely, more rule-of-law based fallback option for a reserve currency and international payments system (which is the important bit!): the Euro. Digital or otherwise.

[rednafi]

> Xi's already suggested making the Yuan a global reserve currency, and seeing as much debt they're holding, I'm a little worried they're able to make it happen if this is the US financial strategy.

I wonder why you’re worried. Regime’s change all the time. From a third party perspective, China is no better or worse than the US. Also, given how literally every country under the sun despises US now, this might just happen.

[UltraSane]

The way China manages it's currency is very different to how the US manages theirs.

China maintains strict controls on capital flows in/out. A reserve currency requires free convertibility. Holders need to move large sums instantly without permission. China has repeatedly tightened these controls during stress periods (2015-16 devaluation fears, for example).

Limited access to Chinese bond markets and equities for foreign institutions. Reserve currency status requires deep, liquid markets where central banks can park hundreds of billions. US Treasury market is $26T and extremely liquid. Chinese government bond market is smaller and less accessible.

Reserve currency issuer must run persistent current account deficits to supply the world with currency. China's economic model is built on export surpluses. They'd need to fundamentally restructure their economy.

[maxglute]

>Reserve currency issuer must run

This is PRC's fundamental disagreement. US reserve currency morphed into high liquid, high speculative instrument to fund unsustainable debt, hollowed out domestic industry (triffin)... but this is not by design. It's the result of emergency adaptations moving off gold, then people post rationalize the trinity musts (open capital, floating rates, independent central bank) is what makes reserve when it's unintended structural outcome from failed gold peg.

Now we see hints of end stage USD reserve behavior, debt snow balls and reserve controller will pull the our dollar, your problem card. This US doing current conniptions trying to either reduce USD strength or inflate away debt... costly instability. People forget, liquidity / storage only matters to sovereign buyers who needs reserve for utility... everyone else (now plurality) are private buyers who buy for returns. If we enter end of dollar cycle and USD reserve cost them money, then they go elsewhere

Elsewhere is what PRC wants to offer, HIGHLY CONTROLLED, BUT STABLE reserve pegged to PRC industrial chains, i.e. real economy instead of speculative financialization. This what recent yuan reserve talk is from (note it was old Xi speech republished in Qiushi), so the propose model isn't even in response to current USD conniptions but prediction on end life of US behavior when USD reserve goes from exorbitant privilege to just exorbitant.

It's precisely because logical outcome of current reserve "musts", i.e. triffin charity/global good that makes it ultimately a stupid arrangement where the system breaks when US/owner can't afford to maintain or develops bad habits (deficit spending). Hence, what PRC plans to offer in parallel: stable regulated reserves for "real economy" financial utility. Stable Yuan "bank" reserve can coexist with volatile USD "casino" reserve. Now of course this all heterodox theory, but we are seeing theory of USD reserve limits peaking it's head, and PRC not retarded enough to pickup triffin baton. IMO PRC fine with US dealing with triffin headache and IMO betting US will fuck global creditors when shit hits fan, i.e. they waiting for USD reserve to implode due to inherent contradictions, to show world precisely why yuan reserve not modelled to repeat same mistake.

[UltraSane]

No one sane is going to trust the CCP to manage a reserve currency. The euro would be a much better choice.

[maxglute]

1. No one sane trusts EU after RU sanctions either.

2. Euro share of SWIFT shrunk from ~40% to ~20% post URK war. Part of this technical (t2 reforms), i.e. actual reduction not as dramatic, but Euro as toxic as USD with even less leverage.

Meanwhile PRC went from single digit % cross border settlements 10 years ago to 50%+, plenty of the world trust PRC with their money, not just money but PRC alternative to SWIFT financial plumbing, CIPS. Meanwhile PRC also recycling it's surplus USD to lending... i.e. they're financing more than imf/worldbank/paris club right now. Another indicator that countries "trusts" PRC to manage monetary system, or rather they balancing from losing trust of west.

TBH trust is western mindless muh reserve orthodoxy nonesense. Ultimately PRC has much stronger reserve posture for the same reason US did... for 80+ years countries needed USD for US techstack and then petrodollar, aka modernity was locked behind USD, all the other muh reserve "needs" is downstream of that. Need > trust.

Ironically where trust actually comes in is whether PRC TRUSTS others. Qiushi suggests PRC stable reserve functions something like panda bond lending, where PRC lends liquidity to trusted VIP (real economy) players. Everyone else can keep gambling with USD reserve with high likelihood of debasement. It looks like PRC doesn't want be THE reserve, they want to be VIP reserve while THE (USD) reserve burns.

[throw0101a]

> 1. No one sane trusts EU after RU sanctions either.

The RU sanctions were implemented 'only' because RU invaded another country. If you don't plan on invading countries is there much to worry about?

To a certain extent if you 'just' want to participate in the world economy the EUR seems fine. If you're looking to start geopolitical drama with military actions, is there any currency of a major economy that would not be a risk? Major powers tend to want stability, which would allow them to stay major, so would frown upon anyone stirring the pot (besides, perhaps, another major power: see China with Russia against UA/EU).

[UltraSane]

Settlement and reserve currencies are two very different things. The USD isn't great as a reserve currency but it is still better than all the other options.