In 1970 the world's Debt/GDP was 35.75%.
In 2022, it is 120.23%
In simple words:
- Rich get richer by taking more debt.
- The Middle Class funds that debt.
- Poor gets poorer because they can't get debt.
This complex story starts with understanding Gold
[A thread...]
In 2022, it is 120.23%
In simple words:
- Rich get richer by taking more debt.
- The Middle Class funds that debt.
- Poor gets poorer because they can't get debt.
This complex story starts with understanding Gold
[A thread...]
[1] The world mostly existed on Gold or Bimetallic (mix of Gold and silver) standard till 1920.
Things were easy:
- Keep gold.
- Print equal amount of money.
- This was called gold standard.
But, by early 1920s governments found a new method.
Things were easy:
- Keep gold.
- Print equal amount of money.
- This was called gold standard.
But, by early 1920s governments found a new method.
[2] The world had fought a brutal World War. And, that required almost infinite resources.
With 'Gold Backed' standard, only finite wars could be fought.
BUT the governments needed more resources. And Nationalism became a recourse.
FIAT money (as we see today) was born.
With 'Gold Backed' standard, only finite wars could be fought.
BUT the governments needed more resources. And Nationalism became a recourse.
FIAT money (as we see today) was born.
[3] Folks were convinced to start putting in more faith in Government's abilities, rather than God's Money ('Gold').
Gold can't be created or destroyed.
Its supply won't increase by more than 2-3% a year (a healthy inflation)
But, with marketing FIAT was made legitimate.
Gold can't be created or destroyed.
Its supply won't increase by more than 2-3% a year (a healthy inflation)
But, with marketing FIAT was made legitimate.
[4] Folks who disagreed couldn't do much.
For eg. in 1933, an Executive Order was passed in the US. And people were pushed to give up their Gold.
Governments on the other hand kept aggregating more gold.
[A push to legitimise the FIAT]
For eg. in 1933, an Executive Order was passed in the US. And people were pushed to give up their Gold.
Governments on the other hand kept aggregating more gold.
[A push to legitimise the FIAT]
![[4] Folks who disagreed couldn't do much.
For eg. in 1933, an Executive Order was passed in the US...](https://pbs.twimg.com/media/Fo58g1NakAA1TMS.jpg)
[5] The world existed on/off the Gold Standard till 1971.
And, then...
And, then...
[5] In 1971, the Gold Standard was completely dropped by the US.
Other countries had no option but to fall in line.
The world had now moved to the narrative: governments can't default.
This gave governments almost infinite power to print as much money they liked.
And...
Other countries had no option but to fall in line.
The world had now moved to the narrative: governments can't default.
This gave governments almost infinite power to print as much money they liked.
And...
![[5] In 1971, the Gold Standard was completely dropped by the US.
Other countries had no option but...](https://pbs.twimg.com/media/Fo59ICHaMAA8vjG.jpg)
[6] And, distribute to their friends.
Result:
This is the debt/GDP chart. You can clearly see that the debt's contribution to our world's GDP has skyrocketed post 1980s
You will ask: how does it impact me?
Result:
This is the debt/GDP chart. You can clearly see that the debt's contribution to our world's GDP has skyrocketed post 1980s
You will ask: how does it impact me?
![[6] And, distribute to their friends.
Result:
This is the debt/GDP chart. You can clearly see th...](https://pbs.twimg.com/media/Fo59seraMAAjf0d.jpg)
[7] Well it does (A LOT)
Rich people take debt. And, build Empires.
Middle class pays for it (higher taxes).
And, the poor hardly get access to that 'debt' ever.
They provide manual labour to build debt driven empires.
Rich people take debt. And, build Empires.
Middle class pays for it (higher taxes).
And, the poor hardly get access to that 'debt' ever.
They provide manual labour to build debt driven empires.
[8] If history teaches us anything, it is that creative financing can only work upto a point.
One day: like all bad Empires, the debt driven Empire will fall too.
And, the repercussions will be bad.
How are you preparing for it?
One day: like all bad Empires, the debt driven Empire will fall too.
And, the repercussions will be bad.
How are you preparing for it?
[9] Watch this video on Gold, that I have done: it will help you understand the historic context.
Where the story started from?
History is our greatest teacher. Only if we pay attention.
Video: youtu.be
Liked the content? do consider Retweeting.
Where the story started from?
History is our greatest teacher. Only if we pay attention.
Video: youtu.be
Liked the content? do consider Retweeting.
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