Been sitting on this one for a long while.
That’s primarily because this topic is so fucking massive and so fucking complex, that my piddly little three thousand word rough limit for these Pickup Truck Diaries articles isn’t enough. So for this one, I’m going to expand my limit to whatever feels right, knowing full well many of the pieces in this ongoing series already end up bloating to well over four thousand words. And this might end up being even longer, if work like “The Rainbow Bible” is anything of an example.
(Edit: Yep, sure did. It’s long. Fair warning.)
That being said, welcome back!
If you’re a long-time reader of this infrequent series, you’re likely interested in expanding your knowledge, self awareness, and self reflection across a myriad of big picture topics!
And there’s no real topic bigger than Capitalism and the attached economics behind it, as it remains the broken system almost the entirety of the modern world utilizes, long since giving up barter economies or the like outside of extremely rural settings like the ones I grew up in. Plus, we all know about the Soviet Experiment and Cold War attached to that, as well as regimes of “partial capitalism” such as modern China, Cuba, or postwar Vietnam and the like, who often state they are still transitioning to Socialism proper even now.
In regards to barter economies – don’t ask me how many times my old man traded various forestry industry skills or products for various favors, resources, or other such things. I think one time he even cut log rounds himself with a chainsaw just for table settings for somebody’s wedding!
I’m a big fan of skill sets and trades, and my large warehouse of accumulated talents and toolkits has been quite handy in that regard, especially when my odd savant brain takes on a new hyperfocus passion to tickle the autistic side in me.
So today we’re going to try and get a crash course in it all, as well as examine some of the big issues in Macroeconomics right now such as US Market Corruption and Racketeering.
Hopefully we’ll ultimately use one specific American company within the US markets as a good example on why everything is absolutely fucked. At least in the country that has been screaming about the virtues of capitalism for centuries, the good old US of A.
They “won” the Cold War, right?…
So let’s start with what “Macroeconomics” even means. You can google the wikipedia page for yourself, but the quick and dirty is that “macro” is the opposite of “micro” in that it means big instead of small. Economics is largely a pseudoscience based on some statistics and various different analytics of general market trends, following Boom and Bust cycles. If I had a loonie (that’s a Canadian one dollar coin) for every time some business or economics major tried to sell me on some big idea of Capitalism saving the world’s problems, I’d be a very rich motherfucker. Still, when we use Macroeconomics as a term, we’re often talking about big picture economies, across entire nations, governments, and even the geopolitical world at large.
But where did economics come from? How did we get to this strange world where everything we own is defined by a digital online bank account with no actual “thing” in our hands?
All we have is numbers on a screen!
Well, it all begins with “Currency.” That’s a word most folks might recognize, as there are lots of different currencies in circulation across the world, from the Australian Dollar to Bitcoin. In that far off time of early civilization, even as far as Babylon and Mesopotamia in what is modern day Iraq, barter trades were the norm up until the Shekel, a form of currency based on the weight of grain.
Price and value in any given economy is NOT A FIXED THING after all. It changes with the seasons, markets, and even an individual’s placement of value on a given item. That’s where that old “Supply and Demand” concept comes from.
The earliest written history we have is some dude bitching on cuneiform tablets about the quality of copper he traded for, as a good example. He deemed the copper of poor quality, and thus, valued it less than copper that may have been more pure, or in an easier to use form.
Barter trading is still an awesome system, as it allows local communities reliant on local resources, such as farming or hunting, to exchange their mainstay livelihoods for the other items they need. As an ex-logger whose family is still involved in the business, our bread and butter is fiber, the raw logs required to make paper, lumber for houses, and any variety of other items made of wood. We can directly trade wood that we harvest as a commodity for food, clothing, shelter, or whatever else a person needs in their day to day. (I’m pretty fond of indoor plumbing, electricity, and the internet, for example.)
Obviously we usually get paid in Canadian Dollars, these days! In and around the softwood lumber trade disputes, of course… We’re not going to get into that little economic hiccup here.
A farmer who ranches cattle can trade beef, milk, cheese, or butter, a corn farmer can trade corn, a hunter can trade processed deer meat or leather made from the deer’s skin and brains, and so on, and so forth.
In essence, Capitalism is an accelerated, juiced up version of this principle: Find a market niche, and exploit the fuck out of it for all you’re worth! Hopefully the demand for your product is high, and the supply is low. “Revenue” is all the money you make from your chosen market, and “Profit” is the excess currency or product you have left over after paying all your expenses like transport.
Now, moving along in our little historical timeline, finding specific vendors and products within a barter system can become difficult as societies expand beyond villages and towns. Maybe you have wheels of cheese, but there’s so much cheese out there that nobody wants to trade for it for a living wage! (In Canada, we actually have a Dairy lobby and heavily regulated Dairy industry, to protect our Canadian farmers and prevent America from flooding our Dairy markets with super cheap products!)
Plus, having more than one of any given profession or trade can result in lower prices for these goods, such as two blacksmiths having to lower their prices to compete for the same customers. Obviously the more complicated a society gets, the harder it is to manage barter systems efficiently or effectively.
Thus, the invention of “Currency!”
Basically, what currency boils down to, is taking the common valuation we place on things such as goods or services, and using a proxy that can be traded a la barter systems across the entirety of a community. This is what money is, really. A proxy for actual value. Money or Currency only has value because we believe it has value.
If society collapsed tomorrow, paper money would just be paper.
Nothing more.
Now, there are two big problems with currency as even an idea, much less a practice.
The first, is that currency requires people to actually believe it has that value. If you show me a pretty painted rock, I might think it’s a pretty neat piece of art, but if a given society or government has chosen gold as their preferred currency, I obviously will place my trust and value in the more stable thing I can trade with.
Sorry homie, I want gold more than I want that rock, even though they’re pretty close to each other in physical form.
For a very long time, the earliest currencies were exactly that – rare earth gemstones and metals, that were able to hold value well because they were rare and hard to find. It was easy to place faith in such things, as throughout history many different cultures valued these metals. The Egyptians loved gold, for example, and a good sizable chunk of all the gold in circulation comes from repurposed gold from Ancient Egypt.
Learned that neat little tidbit in an Archaeology class focused on Egypt and The Middle East.
In modern day, there’s even a popular racket with fine art, where an oligarch commissions an artist to make them a piece of art, and then they immediately go to a buddy in the industry and get them to value that finished piece of fine art at stupid prices. They then buy insurance for that piece of art, and voila, suddenly the 10k they paid the artist is pennies compared to the artwork that might be insured for and valued in the millions!
Society loves fantasy worlds where instead of paper money, people still use Gold, Silver, and Bronze, even now in the 21st Century, as a bit of escapism. Now, the very same problem with gold is what makes it valuable… There is a finite amount of the stuff on our planet, both aboveground, and still locked beneath the Earth’s crust in veins of raw ore. Mining companies exist because of this geological fact. They exist to rip apart the Earth, pump their tailings and chemicals into the nearest river or pond, and smelt the raw ore into gold by melting it out of the rock it’s a part of. Then they take that gold and sell it for profit to keep the cycle going until there is literally no gold left to mine in the planet’s crust.
Maximizing profit whilst cutting expenses everywhere else is kind of the modus operandi of Capitalism. Which is why big companies rarely give a fuck about who they affect or hurt as a result. Plus, the dwindling supply means the supply is more and more finite, thus the demand goes up!
Profit first, baby!
So for a long time, the population of the world was small enough that different rare earth metals such as Gold, Silver, or Bronze, could be turned into this “proxy” called currency. Coins and ingots, mostly. Weighing gold was the usual measurement for the stuff.
However, as the Human population grew, there simply wasn’t enough gold and other rare metals to create efficient “Liquidity.”
Liquidity is a fancy way of saying how much money is slushing and flowing around in any given economy. More money, more liquidity, and the “smoother” everything is supposed to go. This is blatantly false, ignoring inflationary principles, and something modern stock market “market makers” abuse to all ends of the planet to justify their useless existence… Literally arguing against the basic principles of supply and demand… But we’re not quite there yet. We’re still stuck in at least the Middle Ages. That’s a bit of a spoiler for near the end.
So governments around the world had to figure out a different kind of currency, as one, metal coins and ingots can get pretty fucking heavy, increasing transport costs. Walking around with a bag of gold hanging from your waist was both inefficient, annoying, and ripe for pickpockets or thieves pulling break and enters. The value of it meant you’d have to pay for guards or mercenaries, and the like, too!
Think of every classic diamond heist movie of the 1900s. Or Entrapment, that classic Sean Connery flick.
As a partial solution to this, creditors, banks and moneylenders have been around for millennia too, charging a little cut on top called interest for lending out their gold or other currencies on “Credit”. And most of the time, this was just a verbal or written agreement on the amount and price, copied down on a clay tablet, papyrus, parchment, or vellum. This worked well enough for many millennia, even before we had a digital world and computer technologies to reduce paper use and memory power to keep track of it all by using other rare metals and electricity. Problem obviously being that those who already had money, could use these concepts to grow their wealth forever, hoarding it all by simply having it to lend out in the first place.
Ever wonder where the concept of banks came from? They started as literally a vault or treasury that people could stash their valuables in, whilst the bank made money lending it out and promising maaaaaybe to pay you a tiny fraction of the interest. Even though they’re lending out everybody’s money to enrich themselves! If you want to know a bank’s profit model, look at how much you make in interest on your savings account versus the interest you pay to them on a Line of Credit or Mortgage.
It got pretty complicated even in ancient history, as things such as the purity of the metal content and mixing of different metals inside different coinage from different countries made each rare metal currency worth different prices depending on where one was in the world! For example, in Coastal Salish territories, even using the traditional barter systems, Copper was seen as powerful for religious and cultural reasons, so it was worth far more than other types of metal. Later, iron and steel would be more valuable than gold in the form of European blacksmithing trades via pots, pans, and other weapons and tools. If you want to get really depressed, look at the gold and silver trade in South America under the Spanish and Portuguese, for example.
Poor bastards.
The second problem with all this metal currency, was that these rare metals were in scarcer and scarcer supply as they were mined. Why else do you think we’re still using repurposed gold from Ancient Egypt?
Much like crude oil, once we dig it all up out of the ground, that’s it. There’s a finite supply. No more to add to the economy! And as technology has evolved, some of these markets became completely and entirely artificial, such as the diamond markets, as modern technology allows for Humanity to compress raw carbon into man made diamonds for industrial applications such as tool heads. Ash and basic carbon, the building blocks of Earthling life, are pretty cheap, it turns out. Just gotta burn some shit! It was only the immense pressure and the millions of years that made diamonds rare in natural environments. (Diamonds are very hard, despite being brittle, so many modern power tools or other tool heads are often coated in diamond dust for extra durability.)
So diamonds and artificial price fixing aside… (Look into the De Beers monopoly, especially involving Russia, if you don’t believe me…) The folks in charge moved to more practical currencies people could put their faith in as a proxy and use in their everyday life. Paper money and other easier to transport and handle currencies came to replace most coinage in many parts of the world. Lines of Credit and Loans were usually tracked on paper already in bank and moneylender ledgers, anyways!
Here in Canada, in addition to metal coinage, we use plastic instead of paper for our money now, saving us anguish by surviving the washing machine and being easy to color code and make counterfeit-proof with shiny stamps and shit.
Now, as currency is a person placing faith and value onto a proxy, paper money needed something to back it up, as in some historical contexts such as The Weimar Republic, hyperinflation got so bad that paper money wasn’t worth more than being fuel in the fireplace.
Hyperinflation literally helped the Nazis take power! (Remember that the next time some finance schmuck tries to tell you they’re helping or saving the world, regardless of if they’re tall, or blonde with blue eyes, mildly racist and shitty as that song shit is.)
Thus came the dawn of inflation.
In short, inflation is the rising cost of goods and services in accordance with boom and bust cycles. The very essence of economics going well or poorly is often interwoven with inflation, that has largely become completely deviated from any actual common sense. Here in Canada, our national news networks often tout 3-6% inflation rates as being good. What they don’t tell you is that the number reported is a monthly compounded number based on an averaged portfolio of goods and services… It’s 6% on top of last month’s 6% and so on and so forth. Doesn’t take a high schooler math level to see that things are fucky once you have 6% increases to inflation every month over a fucking decade!
This also led to governments doing all sorts of sketchy shit like combining inflation into those portfolios or sectors, so they can hide inflation in certain fields or markets. Gas and oil products are a big one that get skewed all sorts of ways in these inflation reporting portfolios to make global governments look good.
“Look! See how good we are at managing our inflation? Ignore the bullshit methods we used to stack the data in our favor and mislead the public that everything is fine!”
Cue that meme of the dog drinking coffee in a burning room.
Because with paper currency, if your economy is having trouble, you can just print more money and pay people more, right?
Wrong.
Without a finite amount of currency, like with the natural bottlenecks on gold and other rare metals, or the artificial limits on cryptocurrencies based on blockchain technologies (we’ll get there at the very end, never fear) the boom and bust cycles of “good” and “bad” economy, reliant on supply and demand, go entirely out the window.
The actual value of your money shrinks, which is why you often see complaints from most modern workers that their raises and the minimum wages set by the government don’t even match inflation. Literally they are getting paid less and less, because the same amount of money they get paid in turn buys less and less. Even if the number on their pay stub doesn’t change, that number is still worth less. That’s why you see price comparisons accounting for inflation all the time in history contexts. A million dollars a hundred years ago might be worth way more today! There are plenty of online inflation calculators if you want to check out your own currency’s value over time in your local context or country.
Hell, the whole silver coin collecting thing is based on older coins having more actual silver in them than modern equivalents! Literally inflation in the very purity of the metal!
Now, boom and bust cycles are natural. If you only ever have a boom, and never have a bust, there’s no restarting at zero to ensure that inflation goes away, and that normal people can live their daily lives without struggling. As we’ve moved into modern capitalism, busted as it is as a finite entropic system, some governments have tried to keep the value of their money tied to something tangible and limited in order to prevent inflation from becoming a runaway freight train. Things like gold or silver “standards” were used to ensure that the paper money being printed would always be backed up by the price of an actual physical thing like gold.
However, many countries like the US, decided to completely do away with the gold standard in the mid-1900s and completely fuck over themselves and their long term economies in the process. When we talk about Fort Knox, or the US gold reserves, we’re talking about this old system that has largely been phased out. The government still has the gold as a backup stash, but the American dollar isn’t backed up by that gold and the two are completely unrelated these days.
That’s the problem of having a currency that doesn’t have anything to back it up that’s tangible.
Paper money as of right now, is really only worth the paper it’s printed on. The only defining factors for a country’s currency value are exchange rates for other global currencies, and now things that artificially interpret supply and demand. Like “GDP,” the gross domestic product created, or general exports and other generalizations of different sectors or market valuations like natural resources, oil, or lumber. It’s easy enough to say: “we’re a hundred million dollar a year revenue company!” And then somehow extrapolate a country’s currency value from whatever the capitalist businesses state publicly as a sector or group.
Many economists trying to tell you that their field isn’t just “made up hogwash” will tell you that their jobs calculating these derivatives of supply and demand markets are very important!
(We could also just fire most of them and go back to a proper backed currency standard like gold or silver, or just permanently limit the amount of currency that can be printed by setting a total cap on it, which is the original concept behind cryptocurrencies – eliminating inflation or reversing it.)
When we moved to digital representations of currencies, just numbers on a screen representing our money, inflation was given a green light to go absolutely fucking nuts, because governments didn’t want anything like a gold standard to hold them back. It also hides that little problem of the rich getting richer by hoarding currencies and thus removing the overall supply of currency by stashing it away like the greedy fuckers such Oligarchs are. Then they use their dragon hoards to lobby and press governments to deregulate them and whatever their markets are, allowing the crimes against humanity to continue unabated.
Governments have little to no actual control over inflation outside of raising or lowering interest rates. Raising interest rates slows the economy down, thus slowing inflation down with it. (NOT stopping it!) Lowering interest rates encourages cheap debt, and tends to boost the economy whilst allowing inflation to go fucking hog wild. In recent decades, addictions to low interest rates have made hyperinflation even fucking worse! But because individuals and companies load up on cheap debt when you have very low interest rates close to zero, jacking them up after to fight against inflation can cause people to default on mortgages, credit, all sorts of nasty shit. Thus politicians and governments are frequently addicted to lower interest rates, fucking themselves and their countries long term in favor of short term boosts to their macroeconomics.
I love using America as an example even as a Canadian, because of how broken and fucked up their economy is. The US Federal Reserve, which is their privately owned money printing company, is doing the exact same thing that fucked over Weimar Germany a hundred years ago: Printing more and more money to try and buy their way out of debt, thus causing hyperinflation and devaluing the American Dollar.
Now, the United States mostly keeps their currency afloat in terms of value these days by pushing it as the “Reserve Currency” for foreign governments, a la that exchange rate stuff above and a kind of copying of the gold standard, but with their currency in place of gold. You might see this pop up in the news in regards to China or other huge economies, which are growing increasingly concerned about how fucked up America’s criminal economy is. They want to divest and find a different more stable country’s currency to use as their reserve, akin to the gold standards of yore. Or better yet for them, make their currency the world’s reserve currency, to have control over other nations like the US does.
The US is one of the most corrupt countries in the world economically, with largely fake markets and a government with something like thirty four trillion dollars or so of debt that they just keep jacking up again and again to keep the lights on. Don’t forget, whilst some countries like Canada have The Bank of Canada to manage the economy, ensuring the government has control over it as a nationalized entity owned by the government, The Federal Reserve in the United States is a private entity! Meaning the government actually has little to no control over it whatsoever when push comes to shove!
Plus, the gerontocracy-riddled congress and senate in America is more than happy to vote to increase the debt ceiling every few months and bury the country in trillions more dollars of debt rather than actually solve the problem of hyperinflation long term.
Again, I’m Canadian, so I’m just telling you how I see it all from the sidelines.
I get it though, knowing most people to be greedy, selfish, stupid, and shortsighted. When you have people literally dying in office or appearing fully senile on TV, you know they don’t give a fuck about what happens thirty years down the line when along the way the entire nation implodes and enters a second Great Depression worse than the first one!
They’ll be dead or retired, after all.
“It’s your problem now, kids!”
And people wonder why there’s so much corruption stateside – with people like Janet Yellen of the private Federal Reserve making millions in “speaking fees” for private banks and market makers on top of her 180k a year salary, eh? It’s pretty blatant corruption happening in plain sight, but in The United States of America, such economic criminality and conflict of interest is endorsed, not punished!
How dare anyone try to have us have actual backing resources to prop up our fake funny money printed currency! We have the right to print as much money as we want!
You sure do, buddy.
You sure do.
Hyperinflation is a scary bad dream, so just let me tuck you into bed.
Pity the lack of longsight in lieu of shortsightedness is going to torpedo their poor country like Ancient Rome! We’re about the same timeline at this point – 400 years give or take from the dawn to death of that empire.
All of this brings us to more modern macroeconomics, now that we have a basic idea of how economists created currency as a fake proxy for real goods and services, thus creating a job for themselves. Although I suppose some economists out there are invested in research into barter systems or some such.
I guess that a dozen people can get a pass.
All of these problems have mingled with each other, alongside the rich oligarchs across the world corrupting economies via buying lobbyists and pushing for more and more deregulation. But they hire clever folks like me who can write big fancy words to make their anti-humanity actions look damn benevolent! As somebody who has once or twice a half decade ago done copywriting work for big banks here locally in Canada, I know that every one of the feelgood local business stories I highlighted was mere public relations and brand cleanliness work to make a money grubbing bank seem like they’re doing good in the world while getting rich off the backs of the common folk.
Remember, the original principle of economics is supposed to be based on the core fundamentals of supply and demand, meaning if there is low demand, and high supply, a given product or service isn’t really worth that much. If supply is low and demand is high, like for the rare earth metals like gold we talked about before, the price and valuation will therefore be high.
These cycles of production, overproduction, and different market niches being exploited, is the fundamental basis for Capitalism. The goal of any Capitalist Entrepreneur is to find new markets where there is medium to high demand, but little to no supply, and then fill that need to make their money.
This works fine enough for raw goods and materials like gold, oil, lumber, or food. Things you can hold in your hands or use for something.
But when providing services? Like me getting paid to write my fancy words? (I don’t anymore, by the way. I chose for 90% of my work to be free for a fucking reason!)
It all gets a lot trickier.
All of a sudden you have these strange interconnected webs of commerce that go through various periods of ups and downs based on these distorted factors of supply and demand.
Boom and bust cycles then occur on larger macroeconomic scales based on various things going up or down in value.
But as we’ll soon see – supply and demand can be fabricated entirely with the right crime and corruption!
Now, boom and bust cycles, as per that inflation thing we talked about above, are a good thing, as I said!
Common folks like me need inflation to get reset to zero every once in a while via a bust period, or our cost of living just goes up forever. Unfortunately, modern markets have become completely split from actual market supply and demand, and with certain markets like housing or real estate, entire industries can become addicted to the concept of: “line only go up!”
Entire economies have become so separate from actual supply and demand, that people only ever want boom, and never want bust, which is a one way ticket to hyperinflation town.
A much shittier place than flavortown, as I’m sure Guy Fieri would agree.
After all, any investment or capitalist venture is supposed to come with risk.
Any venture carries the risk of losing it all. But nobody wants to acknowledge that, especially the middle class folks with a rental property or mutual fund or the like. In the case of modern real estate speculators, housing prices have become so hyperinflated into a bubble, that normal folks can’t even pass mortgage stress tests anymore. The most basic homes for young families or workers can easily be more than a million dollars in many currencies and locations across North America and the world. However, as there is a vested interest in keeping this fake market “high” and for the line to only ever go up, it results in oldschool bourgeoisie landowner vs. non landowner proletariat problems.
Same ones Karl Marx wrote about or something.
Such as, I used to work with a guy who would buy a house, do some reno work, then rent it out. Then he’d use that house equity his renters were paying into for him to buy another house, rinse and repeat like five times! In this sort of method, the housing market is kept artificially high because supply is being artificially constrained by a smaller and smaller number of land owners.
That dude is literally getting rich off the labor of his renters, who are slowly buying that motherfucker five houses.
What a dickhead!
Plus, big money interests have learned how profitable this artificial crushing of housing supply is, and how reliable a demand it is for the human right of housing despite the fake bubble. Companies like Blackstone in the US are buying up large swaths of residential housing to gain real estate monopolies while also ensuring they keep demand high by buying up everything they can and driving market prices upward with false demand whilst lowering supply.
Sounds pretty similar to that old 99% vs. 1% shit, eh?
This demand for housing as a basic human right and need is being actively speculated on and used as a bubbled cash cow by those with enough capital to prey on the need for a home. We as a global society are more frequently seeing companies abuse the more basic human rights like food and shelter as profit centers. And unlike overpaid savant consultants like me, a cost folks can drop at any time – most people don’t have a choice about needing food to eat or a home to sleep in.
As we’re seeing right now, entire swaths of North American GDP and the larger economy are being propped up just like the housing sector in this completely fake way, with these huge bubbles that just make inflation worse and worse and worse. When the addiction to boom finally can’t be sated anymore, the bust cycle is always equal to or worse than the entire boom!
Why do you think “The Roaring Twenties” came right before “The Great Depression” of the 1930s?
But no politician in any of our fake first past the post democracies seeking re-election wants to pop the bubble, because no government ever wants to get blamed for the necessary busts, only the booms. Residential homeowners are one of the largest voting demographics, as it is simply much easier to vote and participate in politics with a stable, permanent fixed address.
And therein lies the rub: The longer you go into a boom, however artificially, there has to be an equally powerful bust like we saw above. Otherwise hyperinflation becomes an enormous problem, and the lowest echelons of a society financially – the lower classes, are completely squeezed into oblivion. The 2008 financial crisis wasn’t even a full collapse, really, because in many cases such as the US, the government just stepped in and printed enough money to bail big business out after they made ridiculous stupid and shitty bets!
They chose inflation over a bust!
This is also where we see talking heads on the news bickering about the eroding middle class.
The “American Dream” is dead.
There is no middle class anymore.
The folks that often think themselves middle class in 2024 – are often raking in six figure paychecks, sometimes with double income across partners, despite being completely detached from the restaurant server making below minimum wage and relying entirely on tips.
Look at modern grocery prices for example. Many food chains even here in Canada have markups of 600-800% extra on top of the base wholesale prices, while inflation is worse than it’s been in literal decades. That average 6% on top of 6% every month, with the news telling us a monthly drop to 3% for a single month is somehow a good thing.
Sorry, that’s not how compounding percentages work, folks. Why else do you see grocery chain boycotts protesting these crazy profit margins on products? I even had an employee show me their grocery store wholesale and markup pricing sheet before. I’m literally not kidding on it being anywhere from 300%-800% markups. The common person can’t get squeezed anymore. They have nothing left to squeeze. Average debt loads are simply that insane. Blood from a stone, as the old idiom goes.
This addiction to boom without bust; “Line only go up,” and various completely fake markets living in bubbles devoid of any actual economic reality is insane to me. Actual supply and demand is nonexistent, because big players can just monopolize and rig it from their end.
And this is where we get into the stock market. The ultimate fraudulent form of Capitalism.
America does financial corruption and crime the best, so it’ll be our test bed.
Back in the day, companies were private entities, owned by a single individual, a board of investors, or a family, a la the Walmart empire. In many countries, companies even have the same rights as real people!
How fucked up is that?
But at some point, there became a market for speculating on the success of companies, or in drumming up financial support within these corporations by selling small pieces of ownership in the form of “shares.”
One share is a very small percentage out of a total amount of shares, which based on the company or market, can be any size or percentage of that company. I could have a company where I own 51% of all shares, and the other 49% percent ownership of the company is publicly traded, for example. Or I could have 10% ownership in shares with 90% on the open market. It varies from company to company and sector to sector.
By selling pieces of a company, allocating, issuing, and selling however many shares they want, that business can raise capital to help run the day to day. But as per that old fun ideal of “Fiduciary Duty,” it also opens up the company to a new responsibility – needing to ensure the company is making good decisions to ensure shareholders are protected. You might see shareholder class action lawsuits across markets when either a small vocal minority or a loud majority thinks the management of a given company is making poor choices that are harming their investment. And they have the legal right to do so, as shareholders of that company.
Personally, in my honest opinion; why go public in order to raise capital when you are then beholden to the people that invested with you? (But maybe I’m biased towards private companies after seeing how fucking manipulated and criminal the stock market is!)
In addition to buying and selling shares, based on one’s risk tolerance or assumptions and bets on the success or failure of a company, that whole supply and demand thing became even muddier because you could also make bets against a stock via borrowing and selling it in a process called “shorting a stock,” and there is even a derivatives market based on betting in batches of 100 shares called “Calls” and “Puts.”
This made everything even more complex and artificial, because Calls and Puts are basically contracts that say you are going to buy or sell an amount of shares in lots of 100 by a given date. Not only can you “exercise” these calls or puts, to buy or sell your shares any time before the date chosen, but you can buy and sell the Calls or Puts themselves, to other people in this so called “Options” market, meaning you are literally betting on top of bets for a price to go up or down, either to get a great deal on shares for less than they become worth at your end date, or to pocket the difference via puts, by selling at a higher price before you expect the price to be worth less.
I do think the options markets should be banned and done away with entirely, as simply buying or selling a stock on lit transparent markets should be enough, and usually only hedge funds profit from it by stealing the premiums regular people pay on these options in their frequent manipulation of stock prices.
Hilariously, Ken Griffin of Citadel Securities bragged in an interview within the last year that “our experts drive prices to where we think they should be.”
Bro, you just admitted to blatant stock market manipulation…
Oh? Nobody in the US cares?
Alrighty then…
Some crazy people even borrow stock, another name for shares, in order to play this options market, especially with puts.
Imagine me paying you to borrow your bike when that bike is worth 50 bucks. If the price of that same bike drops to 20 bucks, I can pocket the thirty dollars difference when I sell it before it drops, (manipulating the price down like in Ken Griffin’s admission) and then only pay you 20 for you to buy yourself a new bike.
“Oh, sorry buddy, I agreed to borrow your bike and pay you back 50 bucks for it, but it’s only worth 20 bucks now, sorry! Here’s 20 bucks to buy a new bike.”
Now, “shorting” a stock, like the above example, is how the entire derivatives market works, like a big upside down pyramid teetering on the tip. It’s absolutely fucked, because the whole premise has to take that money and value from somewhere, which is usually from the companies being shorted as their price drops and drops.
“Hedge Funds” are investment companies that play Calls and Puts alongside normal stock investing strategies, and the name “hedge” comes from having to buy shares to hedge their bets in case options and calls get exercised. Investment funds like these even have a decades old strategy called “Cellar Boxing” in which they short a stock, borrowing high and selling low, forcing a company stock price lower and lower until it goes bankrupt.
In doing so, they pay nothing back because the share or stock stops existing, getting delisted from the global stock markets, and they get to pocket the difference as the company goes into bankruptcy.
Is it supposed to be illegal?
Sure. It’s basically an advanced form of racketeering, which is supposed to be punished in the US by “RICO” laws.
Does anybody in the US in either the stock market or government care?
Nope.
You never have to give back what you borrowed if the company doesn’t exist, right?
Now, this bizarre and fucked up version of inverse supply and demand is pretty much what the entire US stock market is running on right now. The entire US stock market is basically a full on racket at this point. There are lots of corpses to prove it: Sears, Toys R Us, and many more. It’s very easy for a bad actor to “Cellar Box” a company into the ground and say: “Well, they should have changed their business model, so going bankrupt was inevitable. Pity, eh?”
In doing so, they deny that they ever Cellar Boxed the company in the first place, whilst reaping enormous profits as the company gets liquidated. A complete lack of transparency enables this, because a lack of data to prove the racketeering ensures nobody can catch them in the act. And these market makers and investment firms use the profits from this racketeering to deregulate themselves over and over again.
A company famous for doing this is Bain Capital, which would buy companies, drive them into bankruptcy, and then liquidate their assets for cold hard cash. Some companies use puts and shorting to drive the companies into the ground themselves alongside the piss poor management clearly designed to scuttle the ship. A company called the “Boston Consulting Group” or BCG is famous for being hired by sketchy management teams to burn cash as overpaid consultants. They offer shitty business models that drive a company into bankruptcy faster with frivolous bullshit and other poor practices.
I remember walking into a Sears here in Canada whilst it was being liquidated, and while I got some amazing liquidation-price deals on school supplies for my former job as an educator, they were selling everything, even the shelves!
Now, shorts and puts made sense hundreds of years ago before our modern internet-connected digital world. Shipping and transport is one of the few industries that makes sense. For example, if you have a company like The East India Trading Company, which famously had sailing ships travelling all the way around The Horn of Africa from Europe to Asia, if you knew there was going to be bad weather and their ships might sink, you could short that company and try to profit off the company’s loss if it happened.
But everything being digital these days, and many countries getting rid of old fashioned paper stocks entirely, means that not only is instant settlement possible, it would also remove a lot of these sketchy market behaviours and racketeering issues.
There are supposed to be laws against insider trading, to ensure prior knowledge such as company problems or say, a leak in the ship, can’t be profited off of by those involved with a company, but if you look at folks like Nancy Pelosi, whose husband is a stock market investor, she’s made millions off insider trading pretty blatantly via government briefings and the like.
And nobody seems to care, of course.
In fact, the gerontocracy in the American Congress and Senate actively fights against ANY actual regulation for politicians regarding stock market investments. Everybody wants a slice of the profits from the blatant corruption, of course. This very week in June 2024, there were sessions with the Securities and Exchange Commission, the agency responsible for regulating the US markets. The head lady of the committee wasn’t just unprofessional, she actively attacked the SEC’s ability to enforce the markets, despite having a pretty blatant conflict of interest in the form of 30,000 dollars donated by a stock broker – Robinhood.
Do you think she recused herself from the proceedings for that conflict of interest?
Not a fucking chance.
The Supreme Court – corrupt as that system is with lifetime appointments and no term limits, was also simultaneously allowing themselves bribes and deregulating things even further, overturning laws and rulings from decades if not centuries ago!
There are some obvious issues with this. First and foremost being Geopolitics.
While individual exchanges and stock market trading hubs are based in different countries, such as the London Stock Exchange or the New York Stock Exchange, the markets they trade across are worldwide markets. American corruption can bleed into global macroeconomics. Anybody can buy or sell stock in any public company anywhere in the world, insofar as some broker or company is willing to take them on as a customer. Most big banks have built in trading apps and online portals now to trade stocks.
The contagion on global markets has gotten so bad, that some countries like South Korea have banned short-selling entirely after discovering such blatant racketeering, extending such bans for multiple years due to big banks and hedge funds blatantly manipulating their markets.
Google it if you don’t believe me!
But the companies themselves that issued the stock still have to be located in a given country, be it choosing to set up shop in a “Special Economic Zone” like Ireland, where they pay very little in tax in exchange for employing locals, or by having a head office – such as McDonalds being an American Company with franchises across the whole world.
Now, I’m a Canadian myself. Let’s pretend America and Canada were at war, which might eventually happen when the US, corrupt as it is, invades us for our water, oil, and other resources.
In this hypothetical, in and around various agreements, I could wander over to the London Stock Exchange, and short the everliving fuck out of American companies, probably in the military industrial complex like Boeing, Palantir, or the like. (Granted in this hypothetical war scenario they’d be making money hand over fist and my actions would likely hardly make a dent.)
In doing so, shorting provides a direct weapon to attack the economies of foreign nations where it hurts the most – their GDP!
Yet governments worldwide seem largely oblivious to this very open loophole for nefarious geopolitical actors, to attack any given economy via the companies set up and operating in their country.
In the modern day, shorting really makes little to no sense. The internet plus computers have enabled trades and markets to operate 24/7, and also allows for settlement of trades instantly, remember? As where buying stock in a company means you think it will be successful, and selling a stock says the opposite, shorting is usually used as a financial tool to enrich oneself at the expense of somebody else. It means you are betting on a company to either go bankrupt or take a huge loss.
It’s bad faith, bad actor shit, through and through.
Anybody who tells me they’re involved in shorting is basically admitting to attacking innocent people’s jobs, and therefore I’ll spit at their feet – scum as they are.
There are a hundred thousand different ways in which shorting can be abused and in which it can be straight up criminal, which in the usual case of the US markets, is quietly allowed and endorsed like the racketeering examples above. Not only is American stock market regulation pretty nonexistent, but special exemptions are given to large trading companies called “market makers” like Citadel Securities in which they can do everything from “Naked Shorting” AKA counterfeiting stock by pretending they have it, to using PFOF or “Payment For Order Flow” which is illegal and banned in most countries. Naked Shorting is also supposed to be very illegal, as it’s pretty much the same thing as counterfeiting currency. It involves borrowing a stock, without ever planning to buy that stock back. Or doing all sorts of sketchy accounting like “locating” shares that don’t exist to cover their other shorts.
Much like using a credit card to pay a credit card is very stupid and a last ditch financial tool, because the accumulating interest ensures you’ll get trapped in a hole you can never get out of, naked shorting is prolific in American markets. Market makers can abuse their special privileges, arguing that they supply “liquidity” to borrow against a borrow against a borrow.
Uhhhh… Natural supply and demand doesn’t give a fuck about liquidity?… That’s kind of the whole point?
If there’s low supply and high demand, why the fuck would you manipulate that market down via artificially injecting “liquidity?” You’re just actively fucking over the people who trust in real supply and demand, and want their assets to hold a high price point!
But remember, if the company gets cellar boxed and goes bankrupt, these market makers just wipe their hands of the whole affair and pocket all the money they made shorting it into the ground. Market makers even have the special ability to ignore settling trades for over a month, as well as to use “Dark Pools,” also called “Over The Counter Markets” to ensure they can do all the “fancy accounting” for their crime behind closed doors inside their own company where nobody can see their racketeering transparently!
PFOF, payment for order flow, involves the practice of brokers and trading companies buying every trade for pennies so that instead of going to lit exchanges and affecting the price via a buy or sell, they get to hoard it and do whatever sketchy shit they want with it in the name of “liquidity” whilst arguing they provide better prices for consumers. (Which is pretty blatantly false, because fucking around with supply and demand, and removing real buys and sells from transparent lit markets means your market is fake in the first place. You can price fix whatever the fuck you want and racketeer to your heart’s content with market maker status!)
PFOF is lucrative for both brokers serving their customers and for market makers, by giving a kickback to the other broker selling those trades. Why wouldn’t a company like Robinhood turn down a free penny for every trade they give to Citadel to do shady things with? After all, Citadel is paying for control in this scenario – the ability to do whatever they want with those orders with zero transparency as a private business!
This is also why Payment For Order Flow is banned and illegal in most other countries outside the United States for racketeering reasons, because it doesn’t take two brain cells to see how corrupt this practice is, and how easy it is to racketeer with these sorts of special privileges and exemptions that nobody else in the business seems to get.
If you’re a retail trader? Some random person off the street? Good fucking luck!
The market makers will win every time.
All for the sake of “liquidity” which destroys actual transparent supply and demand.
Again, all these sketchy things mean that those “buy” and “sell” trades don’t hit lit markets, never affect the real price of the stock, and can be internalized into those Dark Pools or Over The Counter Markets, where those trades disappear into their sketchy back rooms to never be seen again. Any given market maker can thus avoid having those orders affect actual Supply and Demand, and keep their racketeering game going!
Even the current head of the Securities and Exchange Commission, Gary Gensler, has admitted publicly that 90% of retail trades from the average person NEVER go to lit markets, being snapped up via PFOF and Dark Pools.
Dark Pools are often argued as a means for giant stock purchases to avoid sending any given stock crashing or skyrocketing, especially if an insider in a company was making a purchase, or a company was being bought or acquired by another.
Literally it’s an argument against transparent free market supply and demand!
And we’ve seen for decades now how that shitty excuse basically gives American Hedge Funds, especially those with that special “market maker” status, a green light to racketeer and manipulate the stock market however they want.
Which brings us to Gamestop…
Now, a lot of folks saw that three years ago, Gamestop stock suddenly spiked to hundreds of dollars out of nowhere!
Wow! The supply must have been small and the demand must have been huge, right?!?
Well, the demand was certainly high, and the FOMO crowd according to the SEC report drove that price increase entirely.
Just average folks buying the stock.
But underneath the surface, more nefarious racketeering shit was happening, as above. See, Gamestop was another company that Hedge Funds had targeted for their racketeering, via the Cellar Boxing, Naked Shorting, and Dark Pool manipulation we just discussed.
Now, Gamestop could have been another Toys R Us or Sears at the end of the day, forced into bankruptcy as Hedge Funds made millions off naked shorts and the liquidation of assets afterwards.
However, a former stock market trader named Keith Gill, using the pseudonyms of Roaring Kitty on Twitter, and DeepFuckingValue on Reddit, started pointing out via different social media platforms that Gamestop had the chops to be a profitable business, and that the crazy short percentage clearly indicated something fucky was happening.
The supply and demand for Gamestop’s stock just didn’t make any damn sense!
Some time after Gill started pointing out the pretty blatant crime, an investor named Ryan Cohen, known for his successful pet business Chewy, took an interest, and invested a large chunk of money into the company, later moving into management and taking a leadership position whilst also refusing any financial compensation, which for CEOs of large companies is often egregious, often in the millions of dollars.
Across the US and even the wider world dominated by US markets, retail investors, the average folks who were being sucked dry via the above abuses of PFOF, Dark Pools, and Market Maker exemptions like “supposed to be criminal” Naked Shorting, realized a key fundamental flaw in these criminal schemes.
When you borrow something… You have to buy it back!
Gamestop was shorted deeply, via these chronic abuses of market maker exemptions, in the same Cellar Boxing playbook style similar to Bernie Madoff, the original creator of such a ponzi scheme of racketeering who had been arrested for similar doings around the time of the 2008 financial crash (a result of just one of the real estate bubbles before.)
Hilariously, America was, and is still so corrupt, that Bernie basically had to admit his fraud and racketeering to his sons also working at the company in order for them to turn him in for his crimes to even be punished!
Remember – in America, apparently crime is okay as long as you don’t get caught?
Via a combination of Dark Pools, Naked Shorting, and other criminal activities, combined with the complete deregulation of US markets over time – Gamestop’s stock was shorted many times beyond what should be publicly available to buy or sell! And while you can borrow against a borrow against a borrow for a while, like our credit card example, eventually you have to buy all those shares back, at whatever price the market’s supply and demand lists them at.
The original plan was clearly to drive Gamestop and other companies in such short portfolios bankrupt, remember? They never expected to have to buy anything back to cover their ponzi scheme!
That’s why shorting is also banned in some countries now like South Korea – because you can crash entire stock markets if your upside down pyramid wobbles too much or spreads out too far. One of the most basic concepts of shorting is that unlike simply losing your money with a buy, shorting carries infinite risk. If you borrow a stock at 10 dollars, and expect it to go down to 5 dollars so you can pocket the difference and buy the stock for cheap… Well… If that price instead goes to 500 dollars a share, you’re now suddenly in the hole for 490 dollars!
This is the base concept behind a short squeeze. If you want some famous examples, Porsche and Volkswagen in 2008, or even Tesla, are good examples to research, as much as I fucking hate Elon Musk with a passion as a god damn fascist.
A group of individual investors who notice a crazy high short percentage – can thus buy a stock that is heavily shorted en masse, with whatever means they can, to try to ensure their purchases are registered on a lit market. Subsequently – because a market maker or short seller has shorted the stock beyond 100% as per the Cellar Boxing playbook – that basically ensures that those who do own the stock can demand whatever price they want from that short seller who by law has to cover their borrows.
The Porsche/Volkswagen short squeeze drove share prices up to something like 76,000 dollars at the peak!
Now, in the case of Gamestop, everybody clever enough to realize the short squeeze potential piled in, and the FOMO alone of everybody buying organically drove the price up to a high of something like 600 dollars!
However… This moment in history, referred to by many as “the sneeze” was not an actual short squeeze.
It was just retail investors buying! Despite 90% of orders being hidden away in Dark Pools and Over The Counter markets, the price was still being driven up! The SEC did a report on the event that basically confirmed this!
Now in stock market trading, there’s a concept called a “Margin Call.” A margin call involves those who have lent a hedge fund or investment company money, or stock, or collateral – which can even include clearing agencies like the also private Depository Trust and Clearing Corporation, run by Cede & Co. (Who also committed blatant international stock fraud during a stock split to help cover the Gamestop stuff up.)
These groups call in their loans because it looks like whoever borrowed from them won’t be able to pay them back if things continue.
In a real short squeeze, companies actually get margin called, and have to buy back or pay back whatever they borrowed by force. Those who had invested in Gamestop as regular retail traders wanted a margin call, so all these racketeers like Citadel Securities, Susquehanna, or Archegos, would buy back many times the total number of shares in existence, ensuring the sale price could be whatever crazy high number the buyers wanted. The highest stock price I know of is Warren Buffet’s Berkshire Hathaway stock, an investment firm mostly invested into Blue Chip big money stocks. As of me writing this Pickup Truck Diaries article, that stock is 610,000 dollars per share.
So we know that stock prices can theoretically go up forever.
However, the racketeering and naked shorting abuses these market maker exemptions had enabled were so widespread that they would make the 2008 crash look like a sandbox at playtime. Watch the movie “The Big Short” if you want to see how this played out in real time in the housing and mortgage industry – when criminality in markets goes completely unchecked or unregulated for decades.
Now, in the case of Gamestop, some really bizarre things happened.
For the record, I was a bit late to the game. I invested in the stock in early February of 2021, just after the sneeze. But after the initial hype died down, those who were suddenly on the hook for infinite losses, decided to double down on the crime instead of settle up and potentially survive.
Instead of capitulating to the short squeeze, they decided to continue to use Dark Pools, Market Maker Exemptions, and Naked Shorting to artificially beat down the price via illegal market techniques like “spoofing” or “short ladder attacks.”
All of a sudden despite enormous retail trader public sentiment, the stock crashed down enormous percentages, because market makers like Citadel could easily use that 90% internalization via the Dark Pools to hide all the buy orders in their sketchy back garage, whilst allowing all the sell orders to go to the lit markets as normal. Multiple big investment companies involved in Cellar Boxing the company joined this racket and ponzi scheme, making the stupider retail investors think it was all over and they had lost.
That wasn’t the case.
Because in order to keep the price artificially low via all this open crime, visible on the ticker each and every day for at least three years now, they had to continue shorting! Instead of just settling their bad bets and perhaps surviving, they instead chose to keep pulling the slingshot back, borrowing against borrows for years.
And for three years now, not a single US Government institution like the DOJ, FBI, or the like, has done anything about it. They’re pretty obviously complicit in the ongoing racketeering, allowing it to run unchecked. Doesn’t take a genius to see the ticker issues on a daily basis.
By abusing Dark Pools/OTC markets, and ensuring they snapped up the majority of trades via PFOF, Citadel and other criminal actors doubled down on the crime in hopes that retail traders would lose interest or give up, enabling them to continue to Cellar Box Gamestop into the ground and get away with their racketeering scot free.
Unfortunately for them, a lot of this crime was pretty blatant to anybody with two brain cells. Manipulated short percentage lists the stock as only 10-20% shorted on any given day, but the sheer volume of trades in the stock indicate that Gamestop is shorted something like 1000% to 2000%. Some days the volume is multiple times the entire float, or the total shares available for the company!
The squeeze never squoze. It still hasn’t.
But unfortunately for Canadians and other international investors like me, blatant US deregulation, corruption, and sheer unwillingness or inability to take oligarchs and billionaires behind these hedge funds to task means even three years later, we’re still holding our stock purchases, patiently waiting for the day the criminals and racketeers run out of money to keep pulling the slingshot back further and further.
My old man keeps telling me we’re still fucked because it’ll only be then that the corrupt US government steps in to fuck us over out of our short squeeze money somehow by forcing a settlement number per share, regardless of the international lawsuits that will ensue
I very much do not want that to happen. I have a Humanist Utopia to ensure, after all.
Some have speculated that these hedge funds are trying to make the problem so big and so catastrophic to the US and global economy that they’ll get bailed out like some banks did in the 2008 financial crisis. After all, the short thesis is dead. They have no other way out.
In the past three years, folks like Ryan Cohen on the Gamestop Board have focused on profitability, to ensure any shorting of the company is straight up moronic. 2023 marked a complete turnaround of the company, going from losses in the millions every year, to a profit of 6.7 million dollars by the 4th quarter. Additionally, the company has tried to play off the blatant crime attacking their business by doing share sales, eventually culminating in something like 4-5 billion dollars in the bank.
Even if they did nothing and just sat on that money, investing in things like US Treasury bills with a return interest rate of 5%, that’s something like 200+ million dollars a year, almost the entire expense costs of the business! There is zero quantitative data that supports the company going under anymore. The media, obviously paid by the racketeering hedge funds and seeming not to care about market manipulation charges, have been screaming shrilly to “sell Gamestop” for three years, despite all these new events. I just take it as more confirmation bias at this point.
Plus, you’re trying to tell me that a company with more money in the bank than even AMAZON, has a share price that keeps going down? 4-5 Billy in the bank? Foreseeable profitability moving forward?
Clearly the supply and demand for the company’s shares is 100% fraudulent, because there are zero business fundamentals that support the share price being so bizarre and so clearly fucked for three years.
So anybody shorting the stock at this point has to be a fucking idiot, or simply trapped. Because the moment one of these criminal hedge funds starts to settle up and cover their shorts, the barest minimum of even 10% of those orders hitting lit markets outside the Dark Pools will mean the squeeze will finally begin.
Only the first company short on the stock to settle their trades before the price gets too astronomical might survive. A big “might,” after three years of doubling down on the crime by borrowing against borrows and manipulating the price of the stock, paying all the while for blatant mainstream media attacks on the company and investors.
Now, the US is due for collapse a la Rome as we discussed previously, resulting all the way from leaving the Gold Standard in the 1900s, to the 34 trillion dollar and growing debt load, to other countries wanting to ditch the American Dollar as their reserve currency. This is before even considering the country’s leaders and governments openly allowing it to get so bad – all due to allowing open crime and lacking any sort of corruption laws to stop billionaires and oligarchs from manipulating the entire financial systems of the country.
“The chickens have come to roost.”
Sorry, Americans, I’d rather get rich, stash all my money in Canadian dollars as your currency tanks to zero, and build a new Humanist Utopia, even if it’s off the backs of those poor hedge fund billionaires that decided that racketeering was perfectly fine and dandy. Honestly, this might offend some of you, but I think the world would be better off without the US, for reasons ranging from The Great White Fleet, to South American Coups, to the CIA trafficking crack cocaine to their own citizens to raise funds.
The list of historical crimes and horrors just goes on and on with you Yanks.
Not to say the contagion is limited to just the US, along those macroeconomics and geopolitical markets from before. Any investment firm or company shorting these various Cellar Box target stocks is in deep shit. Already several short selling funds have gone bust, starting with Archegos under Bill Hwang, on trial right now for fraud! Melvin Capital under Gabe Plotkin went under around the same time. However, to avoid the liquidations of those portfolios starting the mother of all short squeezes, companies like Citadel Securities and Credit Suisse stepped in to buy their portfolios, to avoid it happening by hiding their shorts with others, being in the same boat.
Thus continuing the crime whilst pulling the slingshot back further and further all the while.
Then Credit Suisse went under, and the Swiss government forced UBS, the other largest Swiss bank, to buy up Credit Suisse! (Plus they mysteriously sealed all records of any of it for 50 years…)
Red flags much Switzerland?
You want to tell us something about that bag of dogshit you just placed on the UBS books?
Guess I’ll get my short squeeze money from both America AND Switzerland going broke.
None of this is financial advice, and I have zero financial accreditations, but I certainly wouldn’t want any investment involving the Swiss Franc or the American Dollar anywhere near me right now….
The fact that not a single American (Or Swiss) institution or government has done anything about it in three years has only built up the chip on my shoulder, as the crime has been pretty blatantly visible on the ticker for years, in addition to the damn head of the Securities and Exchange Commission admitting to the corruption out loud.
The SEC was even rude and ignorant enough to make a joke PSA shitting on retail investors, buying into the whole idea of “meme stocks” that hedge funds pushed via huge media and troll farm media investments against the stock (which are just misdirects to try and disenfranchise those caught up in this ongoing crime. If it’s just a joke stock, there’s no danger or problem, right?…)
Listen, I’ve spent the last three years learning just enough about macroeconomics to understand the bare minimum to be able to write an article like this, sans any economics degree or background. Again, none of this is financial advice. I’m just an old educator trying to teach people about the greater world in this non fiction series.
But even in this article, I’m sure you can see some of the glaring flaws in both Currency and Capitalism here.
Without any tangible thing to back it, any form of currency is just a promise. With no gold or silver or any other standard, currencies are all just made up hogwash devoid of actual supply or demand, as GDP and inflation numbers can be skewed, hidden, or twisted any way a given government wants – to make themselves look strong and functional on the global stage.
Cryptocurrencies were a third party attempt at solving this, as they rely on a computer doing math equations to “mint” or create each unit of cryptocurrency instead of just printing it. The Anonymous Japanese guy behind Bitcoin designed it so there would be a maximum number of Bitcoins able to be minted, in attempts to solve inflation. But also designed the math problems to get harder over time so that fewer and fewer Bitcoins could be minted as the supply rose.
I had an opportunity to buy Bitcoin at 50 bucks when I got interested in cryptocurrencies over a decade ago. But I listened to a stupid fucking ex who told me I was a broke idiot, and never did.
Ugh. Why do I ever listen to the ignorant?
Still, the problem with cryptocurrency became threefold.
Firstly, it’s largely unregulated. As a result, it became a popular form of currency for the dark web, to buy everything from illicit drugs via Silk Road, to being able to outfit an entire paramilitary squad with a damn APC for the equivalent of 100k! And it enabled other more horrible, illegal things. Because it isn’t regulated or managed by most governments, even the racketeering criminal hedge funds up above got into the space and started pumping and dumping cryptocurrencies as collateral for their stock and financial investments! It’s illegal in the stock market. But being unregulated, they can pump and dump all they want with cryptocurrencies.
It doesn’t really matter that the currency is designed to be inflation-proof if it can be manipulated by the same bad actors who rely on just buying and selling it rather than mining it the old fashioned way via computer math problems.
Second, the space became oversaturated. While everybody has likely heard of Bitcoin and Ethereum, there are literally hundreds if not thousands of cryptocurrencies now, all with different valuations based on whoever wants to invest in them. And not all of them have the same restrictions as Bitcoin does by design to fight inflation. It’s become rife with scams and oversaturations, meaning aside from the staples that everybody knows like Bitcoin or Ethereum, most cryptocurrencies will never be worth more than pennies.
Finally, adoption is the key to any successful currency. It’s easy enough for a government to dictate what currency they use, as it’s usually a currency they control and mint. While the original designs behind blockchain and NFT technology were for allowing everything to be traceable and transparent to and from crypto wallets via the blockchain, whilst also being inflation-proof… No one cryptocurrency has been adopted by a majority of governments, even the big nations with lots of financial pull.
You can try to pay me in Bitcoin, but if I tell you to fuck off and pay me in British Pounds or Euros, you’re in the minority. You have no choice but to fuck off and look for somebody else.
All this to say – we all kind of know Capitalism is a dead end entropic system. Even if you account for the service based markets and businesses that can never run out of their given product – Human brain power, a la German Engineering for example… Eventually outside of some key industries like forestry and agriculture where the resource grows back, many markets are finite. There is only so much oil, gold, or even peat in the ground to harvest and sell. Plus, Oligarchs hoarding more and more cash over time makes the system even more top heavy and unstable, leaving everybody else to suffer.
Capitalism allows you to buy whatever you want with enough capital, be it rocket ships like Space Karen, or entire politicians or governments to deregulate your markets and allow yourself to do whatever the fuck you want.
Thus, Capitalism is doomed to things like inflation and net negative downward spirals, no matter how much billionaires, governments, and oligarchs tell us it’s amazing, and tout all the modern advances in technology and the like it has produced via “competition.” (Which is a laugh, as basic scientific progress would have gotten there eventually for most things. If anything – it’s more an argument to fund public science and research!)
I’m an Anarchist Ecosocialist myself. I want to help people and the planet while retaining my own autonomy, free of any hierarchies whatsoever, be it governments or oligarchs.
Do I need currency, macroeconomics, or the stock market to live that way?
Nope. Things like mutual aid, barter systems, and community support systems manage pretty much all of that in smaller contexts. And if they become less practical on national scales, isn’t that an argument for smaller and smaller communities, nations, or governments?
(That was the original premise behind the Republican party in the US by the way, as they tend to want state power and control and autonomy, free of Federal controls. It’s only since the 1900s that it became the fascist-loving, christian nationalist, bigoted farce it is now, tea party and then orange face cult and all.)
But despite all my griping about American corruption in this much longer than normal edition of The Pickup Truck Diaries, I’m also kind of grateful to the USA. The collapse of the United States in slow motion is a great example of what not to do as a nation state moving forward in many myriad ways.
Ensuring you have strong anti-corruption laws and regulations seems to be a pretty big one, even if you find yourself trapped in the inevitable entropy of Capitalism.
Bah.
We’ve been here long enough.
Hopefully you learned something! If you’re eager for more reading on Macroeconomics, I highly recommend “The Dollar Endgame” by Peruvian Bull, a book compiling all the due diligence he did over the past three years. That DD series is also how I know the USD is gonna be worth garbage soon enough.
Additionally, most of my reading was from a library of submissions over on the subreddit “Superstonk” which was the eventual migration point amidst all the shills and mod corruption for those invested in Gamestop’s Stock. There’s a lovely “Due Diligence Library” with something like 180+ unique pieces of research and education compiled for you by random retail investors like me to learn more about both this specific case of US market corruption and racketeering as well as other wider macroeconomics issues.
But for now, my back is killing me.
So let’s get the fuck out of here.
-McRae
