Please allow me to bloviate some economic theory ideas in this lull of sports activity.....
For a long time I have been weary of the fiat currency, the US Dollar. My idea of a "Strategic Economic Reserve Fund" coalesced around a few thoughts.
First, in some ways I am a gold bug. Though not practical in today's economy, it did restrict politicians from spending money they do not have. It also helps to create trust and stability in a country's currency.
Second, In "On the Brink: Inside the Race to Stop the Collapse of the Global Financial System". Fascinating read about Hank Paulson's day to day during the Great Recession. Previously, he was the head of Goldman Sachs. He stated he never worried about a run on Goldman. All the other Investment Banks became targets of Wall St in the fall of 2008. Everyone knew that Goldman has $60 Billion worth of USTs at the New York Fed. (back when $60 Billion was a lot of money). In essence their gold supply. (side note, The Russians approached the Chinese in the summer of 2008 with the proposal to both dump US GSE debt (Fannie & Freddie), approximately $1.1 trillion, in an effort to break the US financial system. The Chinese refused to participate and the Chinese FM warned Paulson at a dinner party. Given the opportunity again, do you think either would choose to or not in today's environment?)
Third, It is frusterating watching President Biden using the Strategic Petroleum Reserve for political purposes.
I'd like to see the establishment of a "Strategic Economic Reserve Fund" to protect the US dollar, the Dollar's reserve currency status and ultimately the economy/ American way of life.
Think of a basket of assets or an American Trust Fund to ensure the viability of our currency and ability to operate our economy while under extreme distress. What would it take to maintain our economy for one full year in a worst case scenario? Do we have enough food supply? Fertilizer to maintain food supply? Armanats to fight a two front war? The industrial capacity to replenish? Oil (& other means) to power a domestic economy and fight an existential war? A new age Fort Knox of economic reserve/ power.
The "Strategic Economic Reserve Fund" is an insurance policy for our government that shows the world the USA will always remain the best place to invest and have the strongest current known to man.
Now more than ever our enemies are seeking to create a multi polar world at the expense of our prosperity. Russia, China, India and the 'Global South" (BRICs) are seeking to de-dollarize with a new currency backed by gold. This might sound hyperbolic, however, this is the greatest single threat to the USA. Without a reserve currency status most of current economic disfunction is exposed. If the flow of capital into the US is reduced, our economy greatly suffers. Think less money to fund everything: military, infrastructure (new roads, schools, hospitals), higher education, etc. Our everything asset bubble deflates and everything we own is worth a fraction of today's value. Look to Britain and how they struggle to maintain their quality of life in a post reserve currency status. While still considered a wealthy western county, the UK's quality of life has been in slow decline for decades. Most prominently, outside of London.
China Ramps Up De-Dollarization Efforts by Dumping A Record Amount of US Bonds
The BRICS Go For Gold
For a long time I have been weary of the fiat currency, the US Dollar. My idea of a "Strategic Economic Reserve Fund" coalesced around a few thoughts.
First, in some ways I am a gold bug. Though not practical in today's economy, it did restrict politicians from spending money they do not have. It also helps to create trust and stability in a country's currency.
Second, In "On the Brink: Inside the Race to Stop the Collapse of the Global Financial System". Fascinating read about Hank Paulson's day to day during the Great Recession. Previously, he was the head of Goldman Sachs. He stated he never worried about a run on Goldman. All the other Investment Banks became targets of Wall St in the fall of 2008. Everyone knew that Goldman has $60 Billion worth of USTs at the New York Fed. (back when $60 Billion was a lot of money). In essence their gold supply. (side note, The Russians approached the Chinese in the summer of 2008 with the proposal to both dump US GSE debt (Fannie & Freddie), approximately $1.1 trillion, in an effort to break the US financial system. The Chinese refused to participate and the Chinese FM warned Paulson at a dinner party. Given the opportunity again, do you think either would choose to or not in today's environment?)
Third, It is frusterating watching President Biden using the Strategic Petroleum Reserve for political purposes.
I'd like to see the establishment of a "Strategic Economic Reserve Fund" to protect the US dollar, the Dollar's reserve currency status and ultimately the economy/ American way of life.
Think of a basket of assets or an American Trust Fund to ensure the viability of our currency and ability to operate our economy while under extreme distress. What would it take to maintain our economy for one full year in a worst case scenario? Do we have enough food supply? Fertilizer to maintain food supply? Armanats to fight a two front war? The industrial capacity to replenish? Oil (& other means) to power a domestic economy and fight an existential war? A new age Fort Knox of economic reserve/ power.
The "Strategic Economic Reserve Fund" is an insurance policy for our government that shows the world the USA will always remain the best place to invest and have the strongest current known to man.
Now more than ever our enemies are seeking to create a multi polar world at the expense of our prosperity. Russia, China, India and the 'Global South" (BRICs) are seeking to de-dollarize with a new currency backed by gold. This might sound hyperbolic, however, this is the greatest single threat to the USA. Without a reserve currency status most of current economic disfunction is exposed. If the flow of capital into the US is reduced, our economy greatly suffers. Think less money to fund everything: military, infrastructure (new roads, schools, hospitals), higher education, etc. Our everything asset bubble deflates and everything we own is worth a fraction of today's value. Look to Britain and how they struggle to maintain their quality of life in a post reserve currency status. While still considered a wealthy western county, the UK's quality of life has been in slow decline for decades. Most prominently, outside of London.
China Ramps Up De-Dollarization Efforts by Dumping A Record Amount of US Bonds
The BRICS Go For Gold
