by Charles Hugh Smith
Of Two Minds
We need to start thinking outside the current system, which has no solutions.
Our convictions about money are quasi-religious: heretics are burned at the stake. I’m not sure which stake I’ll be tied to, because all the conventional choices–fiat currency, sound money (gold, Bitcoin) or debt-free currency (a.k.a. MMT)–are all fatally flawed.
To understand why, consider the wild cards in any monetary system: global trade and credit. Let’s start with credit, which as David Graeber explained in his book Debt: The First 5,000 Years, has been an integral component of monetary arrangements since the dawn of civilization.
Taxes must be paid and seed purchased for the next crop, and so credit in some form–notched sticks, bills of sale, purchase orders, loans–is the lifeblood of commerce and state revenues. Credit naturally divides into short-term commercial credit–credit extended until the goods or payment are delivered–and longer term credit secured by collateral.