Notes from the edge of civilization: Mar. 10, 2024
In greenbacks we trust, or do we? Billionaire bunkers are a new form of feudalism. Researchers turn whey into gold!
On March 10, 1862, America made a move that would mark a significant departure in monetary policy: it issued its first paper money in the form of legal tender notes.
The move came in response to the financial strains caused by the Civil War. Congress approved The Legal Tender Act in February 1862, authorizing the issuance of paper notes (not backed by gold or silver reserves) that were declared legal tender for all debts, public and private.
Prior to paper money, gold and silver coins served as the primary form of currency. Legal tender allowed the government to finance the war by “printing” money rather than borrowing or collecting coins through taxation. Thus, on this day in history, the foundation was laid for the United States’ embrace of the “fiat” money system, which was doomed to fail — as anyone who knows history would understand.
Just 64 years later, on March 10, 1926, a run on the banks in Belgium highlighted the vulnerabilities inherent in the fiat money system. Triggered by fears that the Belgian franc might devalue or the Belgian government might default on its debts, panic spread among depositors leading to a massive withdrawal from banks across the country. The Belgian government responded by imposing restrictions on withdrawals and providing financial assistance to struggling banks.
This admittedly rudimentary look back in monetary history serves as a stark reminder of how fragile our financial systems are and how so-called “value” in fiat currency is based on the trust and confidence people have in the issuing government. When that trust and confidence is lost, catastrophe — as we’re about to find out — ensues.
There is still time to put your financial house in order but it’s quickly slipping away. Now is not the time to procrastinate. Get moving.
Bank runs certainly still remain a concern in 2024, as we are living through a period of extreme financial instability. To reiterate, we certainly hope you’ve been taking the necessary steps to safeguard your assets and ensure financial resilience.
is a great place to start if you’re early in your journey, and he laid out some great advice in our podcast chat a few months ago. Plus, don’t miss our recent conversations with Egon von Greyerz, Mark Jeftovic, and Peter Grandich. Peter spent time with our host, Zahra Sethna, last week and he joins us for an interesting chat this coming Saturday to mark 40 years since he started his career on Wall Street. Peter is a legend and it’s a chat you won’t want to miss.If you’re a billionaire like Mark Zuckerberg, “resilience” looks like a $270 million 1,400-acre, energy- and food-independent compound that includes a 5,000-square-foot underground shelter. But don’t tell anyone we told you. The compound is supposed to be kept top secret and anyone working on the project has to sign strict non-disclosure agreements.
Professors Katherine Guinness, Grant Bollmer, and Tom Doig of The University of Queensland recently wrote that just because billionaires are building bunkers it doesn’t necessarily mean they’re privy to news of some impending doomsday the rest of us don’t know about. It just means they have so much money, they might as well put a fraction of a percent of it into creating a post-apocalyptic hideaway.
The professors argue:
…what is emerging among billionaires is a belief that survival depends not (only) on hiding out in a reinforced concrete hole in the ground, but (also) on developing, and controlling, an ecosystem of one’s own.
They are seeking to create entirely self-sustaining ecosystems, in which land, agriculture, the built environment and labour are all controlled and managed by a single person, who has more in common with a mediaeval-era [sic] feudal lord than a 21st-century capitalist.
Actually, sounds eerily like they’re trying to play God. This doesn’t end well.
As the ultra-ultra-rich seek refuge in tropical fairylands, others are finding opportunity in unexpected places. Researchers in Switzerland recently discovered a process to extract gold from electronic waste using whey, a byproduct of cheesemaking.
According to ETH, a public research university in Zürich, the researchers:
… denatured whey proteins under acidic conditions and high temperatures, so that they aggregated into protein nanofibrils in a gel. The scientists then dried the gel, creating a sponge out of these protein fibrils.
To recover gold in the laboratory experiment, the team salvaged the electronic motherboards from 20 old computers and extracted the metal parts. They dissolved these parts in an acid bath so as to ionise the metals.
When they placed the protein fibre sponge in the metal ion solution, the gold ions adhered to the protein fibres. Other metal ions can also adhere to the fibres, but gold ions do so much more efficiently.
Aw, Switzerland — Gruyere AND gold! Now that’s something we can rally behind.
In case you missed it, here’s what was happening this week on Collapse Life:
While the formal ESG framework may be starting to disappear, expect the concept to re-emerge in the near future under a different name or structure.
Some farmers say the disastrous wildfires in the Texas Panhandle could provide an opening for a better way to produce and distribute our food. Plus, ranchers need your help now.
Our podcast guest this week is a man with life experience worthy of a made-for-TV movie; he's a veteran, a man of faith, a polyglot, and an analyst of super cycles.
At the issuance of paper money it was indeed backed by gold and silver. Like all good ideas born of convenience (you didn’t have to lug around heavy coins) it gradually became corrupted.
First the banks that held the coinage decided it was unnecessary to have a 1:1 relationship with depositors (quietly redefined as investors) and fractional reserve banking was born.
In the 1970s France called out the USA for printing more money than it had gold to back it up. To prove it they sent a battleship to New York harbor to pick up all the gold represented in paper notes to them.
So the crooks put their thinking caps on and pulled off something miraculous. President Nixon took the U.S. completely off the gold standard (Driving a stake through Bretton Woods).
Then the U.S. made an agreement with the Saudis that in exchange for our military protection they in turn would only accept the United States Dollar as payment for all worldwide transactions for OPEC oil.
And so, thanks to America’s superior war machine a deal was struck and the so-called Petrodollar was born. This gave the U.S. government what the French would coin as “exhorbitant privilege”.
But that privilege came at a price that changed America’s middle class permanently. Because in order for countries around the world to be beholden to the USD (trade back and forth) we had to outsource our industry thus eliminating millions of gainful job opportunities.
It also meant meddling in Middle East politics with created tensions at a level that previously didn’t exist.
And, it allowed the U.S. to throw its weight around via sanctions, and engage in war without pesky peace negotiations beforehand.
The truth is, all that cheap shit Americans enjoy from Walmart and elsewhere to offset their declining wages has come at a gigantic (yet hidden) price.
But it’s all coming to a slow and painful end. How it shakes out will be determined by the same crooked families that steered us into this mess in the first place.