Commodities Depend on the Currency
QUESTION: Mr. Armstrong, you said the decline in commodity prices will not reduce production but can actually accelerate output. How can this be? It does not make sense.
ANSWER: Your perspective is too narrow focused and solely dollar based. Because the commodities are declining in dollar terms with the dollar rising, in local currencies outside the USA, the cost of production declines and thus in local currency may commodity producers will make even more. Hence, they increase production. It all depends upon the base currency of a producer. Your reasoning applies to dollar based producers.
In the case of OPEC, they simply need the money and now also have to compete with ISIS selling oil cheaply to fund their worldwide revolution. The budgets of most Middle Eastern countries increased sharply so not they need to exceed previous quotas to make ends meet.
Russia sent T90 Tanks to Syria
Russia has sent its most sophisticated
tanks to the front line in Syria. The T-90 tanks are swaddled in
explosive armor, causing most weapons used against them to detonate on
impact. The rebels have been able to eliminate Syrian tanks with weapons
gained from the West. The T90 should be much more difficult for the
rebels to defeat.
Money v Fiat
This traditional definition of a fiat currency is primitive. A currency is backed by the productive capacity of its people like a share in a corporate. If this were not true then Germany, Japan, and China would never have been able to rise from the ashes with no gold. Under Marxism, a currency is also backed by the taxpayers being shaken down to pay the interest on the debt.
The Wealth of a Nation is not its gold, land, or natural resources for it still takes labor to bring any commodity to market. The Wealth of a Nation is its people. Look at Germany. Its productive capacity was the highest in Europe and it rightly rose to the top. Africa and places in South America where the people are not educated as a whole or productive from an international trade perspective, have been unable to rise to the top.
You are confusing fiscal mismanagement by politicians and equating the problem to the existence of paper money. Not all systems have collapsed. It is always dependent upon the integrity of government. That is the distinguishing factor.
Socrates Investor Level for the General non-Trader Public
- The Investor level of Socrates is live by invitation only.
- Invitations can be requested at www.ask-socrates.com.
- This is ONLY the Investor level for the average person without Reversals and Arrays which are provided in the Trader Level beginning January 1st.
- Here you have the choice of selecting a 30 day trial for 10 dollars which grants you unrestricted access to all three regions of reports, North America, Europe, and Asia. Once that trial expires, you will need to purchase a year long subscription to at least one of the regions which will be $150 annually per region.
- This is for the general public. The advance preview for the conference attendees and they will receive a SEPARATE email regarding the preview next week.
Those waiting for the Trader version are welcome to use this trial until that version is released in January.
DEMO
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