GG — Chapter 13
Let’s say tacitly that I’m accepting your Call to Adventure.
Hooah, Gumshoe. That’s great news because persistently refusing the call leads to doom and disaster. We wouldn’t want that.
No, we wouldn’t. So now what?
Well, Christopher Vogler writes in The Writer’s Journey that “Heroes who overcome their fear and commit to an adventure may still be tested by powerful figures who raise the banner of fear and doubt, questioning the hero’s very worthiness to be in the game.”
That sounds like a perfect job for me. Are you sure a noob like you is ready to hang out with the most skilled hackers on earth?
You’re going to protect me, right?
Me? Gumshoe, I’m the most hacked woman on the planet! They have my bank accounts, my webcam, my hard drive, and lest you forget, my brain!
But the security package from New Society–that’s going to be safe, right?
We have to build it first, Lovey.
Well, I’m not that technical.
Neither am I.
So what am I supposed to do?
You decide what you do.
But how do I know what needs to be done?
Look, G, no one is paying me to write this book. I’m writing it because I’m hoping people who are smarter than I am will decide that a blockchain software package that functions as a downloadable game is a good way to organize people, give them control over their money and privacy, and direct their effort into useful endeavors like saving the planet.
You can’t get fired from New Society and you won’t have to deal with sexual harassment or people cooking fish in the lunchroom.
Okay, but I can’t build it alone. I can only dictate the strategy that the omnipotent algorithm designed. It’s also my job to make sure everyone understands that NO ONE ELSE IS GOING TO SAVE YOU. THE WORLD IS GOING TO $#!&, AND WE HAVE TO SAVE OURSELVES. By which I mean, we’re facing a global sovereign debt crisis the likes of which the world has never seen, and we’re all going to suffer big time if we don’t hurry up and deploy radically different systems starting with digital currency.
What does that even mean?
COVID comes with a cost. Inflation. Housing bubbles. Emerging markets saddled with debt due to predatory and clandestine lending practices. And most importantly for our purposes, the largest-ever allocation of Special Drawing Rights from the IMF in August 2021.
Can you please not steer this conversation to macroeconomics right now? I already feel like my head is going to explode.
But honey, we’re at the place in the monomyth where you receive Supernatural Aid that’s exactly what the Special Drawing Rights are.
I’m already bored.
No, you’re just struggling to admit that you don’t really understand the role of the IMF and what SDRs are, let alone why they are important.
I just thought I was going to sit down and enjoy reading a novel not be taken on a romp through military technology and economic policy, which by the way, bores the crap out of ninety-nine percent of the population.
Gumshoe, if you were a caveman this is the tiger that will eat your baby, so you’d better start paying attention whether it bores you or not.
Think of the IMF as a global credit union founded in 1945 and theoretically in the business of facilitating trade, promoting employment, and reducing poverty. Or in the words of Occupy Wallstreet planner, David Graeber, “The International Monetary Fund basically acted as world’s debt enforcers — You might say, the high-finance equivalent to the guys who come to break your legs.” (Debt, The First 5000 Years, p.2)
Researchers cannot agree on whether the IMF is actually a help or a hindrance to emerging economies perhaps because economists sometimes make bad assumptions. Graeber explains how banks like Chase and Citibank encouraged Third World dictators to take out loans in the 1970’s. The interest rates started low and then skyrocketed to 20%. While the dictators took the loans and put them into their personal Swiss bank accounts, the IMF would insist on repayment by the poor nations which had the effect of “literally taking food from the mouths of hungry children.” (Debt, The First 5000 Years, p. 3)
In 1969, the IMF created its own ‘financial instrument’ or ‘reserve asset’ also called Special Drawing Rights or SDR. According to the IMF, “The SDR is neither a currency nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members. SDRs can be exchanged for these currencies.” Got that?
SDRs are basically money issued by the IMF that trades against any other global currency, but they’re not calling it that.
Ding! Now you understand that in addition to the rife printing of money your government did to try to cope with COVID, the IMF has also just dropped an extra SDR 456 billion into the global economy–about half of all the SDR’s ever issued.
That means nothing to me.
In practical terms, governments around the world just colluded/voted to give each other a whopping chunk of ‘international reserves’ (money). This functions as a line of credit for nation-states. (The SDRs used to be pegged to gold but are now based on the value of a basket of five currencies including the USD, JPY, CNY, GBP, and EUR.)
To put it in perspective, according to the Peterson Institute for International Economics, South Africa borrowed $4.3 billion as an emergency loan, but the SDR allocation gives them an extra $3 billion or so. According to the Wall Street Journal, sanctioned countries like Iran and Russia got $5 billion and $17 billion respectively. Sanctions, schmanctions. Wakey, wakey!
I’m awake. This is fascinating. Truly. Riveting stuff. I had no idea.
Good. Now, in theory, money from rich countries should flow to poorer countries because labor and resources are cheaper. It would be a strategic investment in terms of classical economic theory. In reality, that hardly happens. It’s called the Lucas Paradox. The guy who wrote about it, Robert Lucas, got a Nobel Prize for it in 1990.
Okay, poor people are getting screwed. I kinda knew that already.
This is why Satoshi’s trustless bitcoin system is so important. The reasons money doesn’t flow from rich countries to poor countries are innumerable but they can be summed up by one word: trust. Whether you’re talking about trust in governance, trust in technologies, trust in infrastructure, or trust in skillset, you name it; we don’t trust it.
If you genuinely don’t want starving kids, sexual exploitation, terrorism financing, rampant drug abuse, and young brides committing suicide because they have no control over their situation, you need to adopt public-ledger trustless payment mechanisms otherwise known as cryptocurrencies. Have you done it yet?
The tiger just ate your baby.