Monday, 19 November 2012

tympaneum or archivolts and dosie-dotes

The de-coupling in phases of the world’s monetary supply from the Gold Standard is often cited as the cause of all the world’s ill, and I think I tended to buy this footnote wholesale without really understanding the circumstances but projecting the same consequences. The ability to imagine a different outcome from the same precepts is a good test for anything, including one’s own humanity, and even if one cannot really see an event through to an alternative conclusion—it’s an important exercise, nonetheless. In order to finance an unpopular and lost war with more latitude and flexibility (made inflexible by the lack of a legislative declaration of war and in part by foreign lenders that had grown increasingly wary of the America’s ability to make good on its obligations) than was afforded by dollars not yet fiat, US President Nixon, in 1971, abandoned the Gold Standard as the economic unit of account (at the time, about $35 per ounce and the move was the last echoes of economic inheritance that started with the Tulip Stock Market Bubble of Old Amsterdam or Istanbul) and declared the dollar inconvertible.
That measure, though serviceable, was just a means to an end— something universally arbitrary and scarce, and I am sure had it remained in place, mankind would have long ago harvested all the asteroids and be well on its way to colonizing that diamond planet. This untethering was quickly adopted by all markets and gave central banks license to weave new economic policies. The price of gold (denominated in dollars) has increased exponentially over the past four decades, as has the global population of dollars but I don’t imagine that the relationship is mathematically commensurable in any rigourous or positive way, since all those new dollars (and euro and yen, too) are floating currencies—unpegged to the exchange of any commodity or treasure. I am sure that the long–term consequences were pushed aside by immediate liquidity back then and no one could envision a system buffered but not buffeted, supported by any independent reckoning of wealth. Markets never move lock-step and there are inherent inequalities to begin with, so one should have anticipated deleveraging and inflation, though since that fateful, fitful decision. Financiers and croupiers, however, since have been busily spinning new and complex instruments and shadowy banks to hide the true impact of rising prices and wages that don’t keep stead. This concealment has served up a political and civic situation wherein governments are caught in the web of business interests, behoving them not to make a misstep for fear of attracting everyone’s notice, and lack a clear direction or goal, since any deviation is washed over with money matters. Among divided populations, every nuanced and blatant move turns back on itself and to the economy. It is not indecision that makes some fear a People’s Republic of America or a United States of Europe—there is division and uncertainty, true, but when calls for discussion or warning cannot rise above the din of money matters, we just get unenlightened despots thrall to business.