What Is a Dollar?

I’ve always been fascinated by non-verbal communication, particularly letters and symbols, but also body language. In college I took a counseling course on Neuro-Linguistic Programming (NLP). Here, I learned about directional eye movements and how to determine what type of thinking people are doing as they speak. If your boyfriend rolls his eyes to the upper right while speaking, it likely means he’s constructing a lie. To the left and he’s remembering. 

When Albert Mehrabian, a researcher of body language, broke down the components of a face-to-face conversation, he found that communication is 55% nonverbal, 38% vocal, and only 7% words. This means that postures, eye gazes, facial expressions, handshakes, and gestures are ten times more important to our communication than the actual words we speak. Touch, smell, hair style, clothing, pace and tone of voice also play a significant role in communicating. Even symbols can evoke profound emotions and memories without our being consciously aware.

There’s been some talk about the dollar lately in the circles of financial analysts. We work for dollars and use them every day of our lives, but how many people understand what they represent and communicate. The dollar is perhaps one of the most copious instruments in the world. It’s so ubiquitous and ordinary that most people don’t pay attention to its words, numbers, and ancient symbols. Symbols are important, however, because they reflect who we are and what we represent.

Note the circle to the left, under which is written THE GREAT SEAL. The history of sealing dates back to Mesopotamia, some 7500 years ago. The seal is a profound means of non-verbal communication and agreement. Legally, a contract “under seal” is a deed, which is different from an ordinary contract. A deed is a person’s or entity’s most formal and sincere promise that it will fulfil its contractual obligations. A deed is also a legal document that transfers ownership of an asset to a new owner.

Inside the seal is the Latin phrase Annuit Coeptis, which means “[He] favors [our] undertakings”, and the phrase Novus Ordo Seclorum which means “A new order of the ages (is born).” Between these words along the top and bottom edges of the circle is a pyramid. At the pinnacle is the Eye of Providence, which is historically a symbol of religious and medical organizations across cultures. At the bottom of the pyramid is written MDCCLXXVI, Roman for 1776, America’s independence.

On the right, we find the other side of the seal with the words “OF THE UNITED STATES” on the bottom circumference. Inside is an eagle with what looks to be a scroll attached to its back that reads E. PLURIBUS UNUM which is Latin for “Out of many, one.” Out of many nations, one? Out of many governments, one? Or just out of many states, one nation? The eagle’s chest is covered by a shield. In its left talon is a bunch of arrows. In its right talon is an olive branch.

Hmmm, it’s a bigger undertaking than I thought to read the dollar by its symbols. I’ll continue in another post, when I have time to better research. For the remainder of this post, I will focus on what the dollar is in our global economy today. After all, it’s very different from its original purpose. In the 1970s, the dollar had an identity crisis when Nixon violently and abruptly detached it from gold (the sovereign reserve asset of the world) and reattached it to oil. The good-as-gold dollar was suddenly nicknamed the petrodollar, and repurposed as a debt instrument.

For the past 52 years, the dollar has been an instrument of debt that nations use to buy oil and get involved with global trade. The U.S government simply makes a request to borrow from people via treasury-bond vehicles, and the world generously gives it loan after loan. The government then makes more treasury-bond vehicles to borrow more money to pay interest to the creditors who buy more bonds. And the spiral continues. Hard to believe, but debt is the foundation of the global financial system. The dollar is backed by the power that the government has to borrow forever.

Does this sound like a logical and sustainable system that’s fair and just for all? A debt-based system depends on selling more and more debt. The dollar has worked all these years for two reasons. (1) Because the world has been willing to lend money to the U.S. government. (2) Because the world holds dollars and uses them in global trade of energy and goods. The dollar becomes less and less relevant as nations stop buying bonds and figure out new ways to trade without using this ever-depreciating instrument.

Does that make sense to you? It doesn’t make sense to me. So here’s a riddle for you. In 1975, my parents bought a new home for approximately $48,000. Today that home might be worth $220,000, if someone buys it. The home grew in value, but why? Is this natural? If you build a shed in your backyard and it gets rained on and beat-up by the environment, should it become more valuable over decades? Or less valuable? In a natural world, it would become less valuable because it gets old and rots, but in our artificial world, more valuable.

As interest rates fell over the decades, and the price of homes went up, people were encouraged to move their savings from banks to real estate. People saw the value of their homes double or triple while they did nothing, and they were encouraged by this “magic” stuff that printing money did. Eventually, people could quadruple their cash by doing absolutely nothing but borrowing to buy real estate and selling it later for much more. How? Really?!!!

Not only could they buy homes and resell them, but they could rent them out in a society with an abundance of dollars where the world population and production were continually growing. Tourism boomed like never before and more and more people were able to make more and more money by renting out their homes that were magically going up in value every year. Amazing! If only our ancestors had figured out how to do this a long time ago, they could have become rich too, eh.

In the natural world, value is driven by supply and demand. In the fiat world, it’s driven by more and more credit. Credit is a promise to pay, not an asset. It’s a swindle that was called usury in the Bible and condemned by God. Like magic, infinite credit buys finite energy and resources because people are willing to trade what they have today on a promise for more tomorrow. While it seemed like the system perpetuated growth; it was actually feeding on growth fueled by growing credit and a population boom.

Magic works until people learn the trick, and credit works until the creditors want your collateral. The faith and credit of the United States Government isn’t really collateral that anyone wants or needs. It’s a pyramid scheme, which ironically is the same pyramid that’s on the seal, the deed, on the one-dollar bill. In the end, there is only credit and collateral, and collateral that is held up by credit will fall in value when the credit bubble bursts. Real estate is only worth what someone is willing and able to pay. It’s not magic.

Just an FYI, if my parents had bought $48,000 worth of gold instead of that house, they’d be rich today. Gold was $139.29/oz in 1975, and they could have bought 344.6 ounces with their 48K. Today, gold is $2092/oz. That’s $720,800 dollars and gold is a liquid market, because gold is real money. Once again, the value of your home doesn’t really go up; the value of your dollars goes down. Gold is held as a sovereign asset in 100+ nations because it has NO COUNTERPARTY RISK and is liquid. Kings and queens know that fiat always goes to zero. They just revalue their gold and voila!

Not too long ago, I noticed a 151 year-old mining law was being overhauled by the U.S. government. Why now? What does it matter? Well, if gold went up in price, this would set up the government for a sweet income stream. Could our leaders be preparing for a gold price reset? It’s possible, considering all the geopolitics and tensions in the world. High interest rates for treasury bonds hurts other countries a lot more than it hurts us. Gold always does an accounting for fiat’s mess, and organized resets are a mechanism in history. The last one was done by Roosevelt in 1933. 

So what is the dollar, really? It’s something like the Bernie Madoff story, but a lot bigger. The U.S. is having a hard time these days selling its treasury bonds. For the first time in modern history, treasury bonds are more volatile than gold. We are living through extraordinary times! For a great presentation on this, watch Nate Hagens and Luke Gromen on the Great Simplification. Historically, bond holders have held the bag and have lost everything. Hopefully not you!

For more information on gold and the central banks, check out the World Gold Council. Over 100 nations own gold as a sovereign asset; not cryptos. J.P. Morgan said, “Gold is money. Everything else is credit.” Alan Greenspan said, “In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.” One more quote: “Money is not something you just print. It must be backed by something, either good economy or gold.” —Mahathir Mohamad.

Wealth never disappears; it only transfers. Whether planned or not, it seems the dollar is the vehicle (contract and deed) by which this transfer of assets/wealth is currently transpiring. Is that why our government loves sending dollars to other nations? And creates reasons to do it? This 52-year-old runaway dollar financial system is either (a) the greatest con in the history of the world, or (b) the biggest blunder ever. We will probably never know which one. I found the following interview interesting… Debt Will Collapse Global Economy… Will The U.S. Survive? Brent Johnson – Dollar Milkshake Theory