Summary
➡ Mark Moss talks about the global financial system is changing a lot. Money in many places is losing its value, and this might mean big changes for how we use money like dollars or euros. A speaker explained that money systems have changed over 5,000 years, from gold to paper money. Now, people are losing faith in paper money. This is happening because of less global cooperation, big debts, and less trust in regular money.
➡ Since the 1960s, the US dollar has been really important worldwide. But since 2013, countries like Russia and China are using the US dollar less, as groups like BRICS become more powerful. The world is moving from working together to competing. Big debts and losing trust in the current money system are causing problems. Some countries are thinking about using gold for money again.
➡ Big banks and companies are now more interested in natural resources than in traditional money like government bonds. For example, China is collecting a lot of lithium. Countries are also making their own digital currencies, but this could cause issues, like limiting who can use the money. This new trend is happening in 131 countries and is led by a big project called ‘Project Enbridge’
➡ In Nigeria, efforts to get people to use a new currency didn’t work because people didn’t trust it and were afraid of prices going up. This shows bigger problems with how money is handled globally, like too much money being made and not enough openness. The author thinks the solution could be something like bitcoin, which is open, clear, has a limited amount, and doesn’t depend on borders. They support using systems like bitcoin for the future of global finance.
Transcript
The end of the international monetary order. Now, you can tell that things are going crazy in the financial system. Last week we saw the US treasury auction almost fell. Of course the currencies around the world are collapsing. And it’s not just one currency collapsing. It’s not just the end of small fiat currencies. It’s not just the end of the US dollar. It’s the entire fiat system collapsing. But what most people want to understand is what comes next.
And more importantly, how do we position ourselves today to be prepared for that? Well, I have a treat for you. A couple of weeks ago, I flew all the way over to Europe to give a keynote to thousands of people that had to pay thousands of dollars to see this. And I got the recording and I’m going to play it for you right now. It’s a little bit long, but it’s worth your time.
We’re going to go back to a little bit of history to kind of set the stage so you can understand where we’re going. I’m going to break down three important factors that you need to understand that’s going to tell you where the world is going. It was a fun conversation to have my keynote. Hopefully you enjoy it. Let’s go ahead and just jump right in. Hello, Amsterdam. All right, I know it’s late in the day, I know it’s late in the day, but hopefully you got a little bit of energy left for me.
I got to compress my time a little bit here. So I got to talk really fast. So I need you to stick with me. Hopefully you can keep some energy with me because we got an important topic. The end of the international monetary order. Sounds pretty cool, right? All right, a little bit energy. I like that. So we’re going to go through this. I’m going to show you what the end of this current international monetary order looks like and where I think the most probable outcome goes.
So we’re going to talk about that. All right, we’re going to go really fast here. So the first thing you have to understand in order to know how the international monetary system ends is, first of all, what is the monetary order that we have right now? So if we look at this, the first thing you have to understand is that we don’t want money. None of us want money.
Sounds crazy, right? What we want is the things that money buys us. We want goods and services. And so throughout history, it was always goods and services. We had a barter system. We had to come up with a new technology that allowed the barter system to work better, which gave us a type of money. Many things were used as money. Shells, feathers, rocks. And eventually gold was emerged as the best medium of exchange for this monetary order.
So you can see for about 5000 years gold has been used as money. We’re just going to call it commodity money. Commodity being real things that we can find anywhere in the world anybody has access to go get those commodities out of the ground. And no matter where you get them out of the ground anywhere in the world, they’re fungible. If I get a piece of dirt in Mexico or China or the United States, I can dig gold out of it.
And that gold is fungible anywhere in the world. If I grow wheat, if I get oil, it’s all fungible. So we’re just call that commodity money. So the world operated on commodity money for over 5000 years. We got massive prosperity from that. But something changed. Something changed now in that commodity money. As I said, gold became that medium of exchange. And there was lots of superpowers, there was lots of reserve currencies throughout that period.
I’m not going to go through them all. Before the United States had the kind of us dollar homogeny, it was Britain. Before that. Before that it was France. And before that, anybody know what it was before France? The Netherlands. That’s right. You guys are on the map now. If you measure each one of those reserve currencies, each one of those global superpowers, they’re about 80 years, 80 to 90 years each.
That’s about the time frame that it lasts. But it was always with a gold type of money. Now, something changed after World War II and the new international monetary order started to emerge. It didn’t fully emerge. It started to emerge in Bretton woods. In 1944, the entire world got together and agreed on a new monetary system. And the system is that it would still be gold backed system, but because now of globalization, we needed a money that was faster.
So what we would do is we’d put the gold in the bank, we’d use these paper gold certificates instead, or a ledger system, and we could move money around faster, would help the world speed up. So the dollar emerged as the reserve currency of the world. It was backed by gold. And then all the currencies of the world were pegged to the dollar. It’s the system that we’re in today.
It was established in 1944. If you’re good at math, it’s about 80 years, about the length that most of these reserve currencies last. But something else drastically changed. And this is what we have to understand, in 1971, about 50 years ago, something really drastic changed, where all of history changed and we no longer used commodity money anymore. The dollar was no longer backed by a commodity, was no longer backed by gold, and instead we went into a completely paper fiat money system.
So in 1971, Richard Nixon closed the gold window, the US defaulted on its debt, and we’ve been in this paper money system since. It’s an experiment for all of humanity. We’ve used a commodity money. And now for 50 years we’ve been trying this paper experiment and it hasn’t been working out too well. We’re going to go through that. So this is the existing monetary order that we’re in right now, a paper fiat money system, as ultim Poser calls it, inside money.
We’re not insiders. We’re going to cover that more. Now, as I said, about every 80 years, we know that this resets. I like to call these financial revolutions. About every 80 years we see this. I’m kind of the cycles guy. I was up here on a cycles panel yesterday. I was one in the deep earlier today. Now I like to look at financial cycles, technology cycle, technology cycles and political revolution cycles, but we’re just looking at one right now.
So about every 80 years, as I said, these reset about 80 years ago was the Bretton woods agreement. Now, what we can see, like I said, we’re in this fiat money system, this paper money system, and we’re watching them just collapse left and right, right in front of our very eyes. They’re falling left and right. We have Zimbabwe that just keeps on failing. Of course, the peso, they had to drop the zeros.
We’re watching Lebanon and Turkey and Argentina and Venezuela and all of these currencies just completely melt down. You can see them priced in gold. They’re just plunging left and right. The dollar is still, as we like to say, the cleanest shirt in the dirty laundry, if you will. The dollar is still looking pretty good. So when you see the turkish lira losing 95% of its value to the US dollar, you’re thinking, shoot, probably shouldn’t hang on to that.
Turkish lira should have probably tried to move into dollars. That would have probably been a better bet. So we see all these currencies dropping to the dollar, but the dollar is also crashing in the United States. The US dollar is down 65% to the s and P 500 in the last five years. The dollar is down 45% to the average real estate in the last five years. So it’s crashing too.
We have to understand this, but I want to explain to you why this current monetary system is failing. And there’s three main reasons that we’re going to go through right now, and then we’ll look at what comes after this. All right, but you have to understand the problems first. Let’s break this down. So we have three problems I’m going to break down for you. First. We’re witnessing massive deglobalization that the world hasn’t seen for about 80 years.
Two, massive amounts of debt that are causing a serious drag. And three, the single most important piece, in my opinion, we’ll break this down for you, which is trust. All right, so let’s go through that real quick. So the first thing we have to understand is that the world changes. There’s a story I like of Albert Einstein, one of the smartest men in history. He was a professor, and he would give a test.
One time he gave a test to his students, and one of his assistants came up and said, hey, I don’t know if you understand this, but the test that you just gave out is actually the same test you gave last year. He said, yeah, so, well, but they have the answers on that test from last year. He said, yeah, but the answers have changed. You see, things change in world, and we have to understand these changes to understand what the right answer is for this time.
And so we have to look at how the world’s changed. So since 1960, since we’ve been in this current monetary order that we have today, the world has started globalization. All right? So after World War I, about 80 years ago, when this monetary system emerged, the US was the global hub of the world. It became the superpower of the world. It had the reserve currency of the world.
It was the industrial hub of the world. But since then, the rest of the world’s been catching up. And we can see right here, the United States was still sort of the center. You got Britain over there. It’s a pretty good hub, but basically it’s Europe. It’s like the west, if you will, at that time. If we fast forward through time, 1990, you can see how it’s really started to decentralize.
The rest of the world is starting to pick up. Global trade is starting to pick up around the world. And if we fast forward here to 2020, you can see how this has really changed. Now, why does this matter? Well, now that the rest of the world is starting to catch up, how does the rest of the world feel about using someone else’s money? How do they feel about living under the order of another country that they maybe don’t agree with or maybe don’t like, or maybe that country doesn’t like them and doesn’t give them permission to even be in the global financial system.
Which is why we can see nations like Russia and China for over a decade have been de dollarizing. We’ll talk about BRICS in a minute. But this has been going on for a long time. Since 2013, they have been actively de dollarizing. Why do we want to use your money? Why do we want to be by your rules? It’s like a teenager. They’re ready to move out of the house.
We’re done with that. We don’t want your rules anymore. And we can see on the charts on the left that net buying of us treasuries has gone down. They don’t want to own that money, that inside money, that paper money, that fiat money. We’ve seen gold buying going up. We’ll dig into this a little bit more. But the point is, this has been going on for a long time.
This is a trend that’s been moving along. We have to understand that these are not events. These are processes that we’re watching play out in real time. Now we have the rise of the BRICS. You’ve been hearing about this. In August, we had this big brick summit. Brazil, Russia, India, China, South Africa. They’re rising up as this cooperation, this trading bloc, and they’re challenging now the g seven.
Challenging being a key word. As a matter of fact, we can see how much bigger they are. They’re about the same gdp, but they are massively different in the amount of population that they have. And even the bigger difference is they’re producing most of the commodities, the real things. The US is great with social media and financial stocks, but not so good on things that really matter, like rare earth elements and like fertilizer and things like that.
And so we have the rise of the BRICS that want to rise up. And I said challenge. So when President Xi from China went to the BRICS summit in August, he said, it’s time for the BRICS coalition to stand up and challenge the g seven. Not cooperate with, not work with, not be friends with. No, he said challenge. All right, so this is a fundamental shift in the global order of the world, where there’s no longer cooperation and global trade.
It’s now competing. It’s the United States. President Biden saying, china, you can no longer have these level two and level three microchips. And China saying, fine, then we ban all exports of gallium and geranium to you, which you need for your ev boom. How’s that? It’s that this is the globalization that we’re seeing. And so as this continues to break apart, they’re no longer going to want to work in the global monetary system or the global monetary order that we have today.
That’s number one. Number two, the massive amounts of debt that we’ve seen created the chart on the left right there, is the amount of debt in the United States, which is just like going parabolic. It took the United States from the time it was founded all the way until 1981 to get $1 trillion worth of debt. This year they said, hold my beer, let’s add a trillion dollars of debt in three months.
We just added half a trillion dollars of debt in just a couple of days. Like it’s going completely parabolic. And even worse than that, the chart on the right is from the CBO Congressional Budget Office. They’re projecting it to go to 50 50 trillion. How’s that going to work now? That doesn’t look good for the United States. How about over here in Europe? ECB’s got the same problem.
Massive amounts of debt. It’s almost going straight up. And it’s not just the US. And it’s not just the ECB. As a matter of fact, the big three central banks that really matter are all doing the exact same thing. As a matter of fact, the US treasury put out a report titled the Unsustainable Path. There’s no way out, doesn’t work. Now, we knew it wasn’t going to work.
We always knew it wouldn’t work. We always knew it was going to fail. When is the question. It’s failing. But the bigger reason why it’s failing isn’t just the deglobalization of people not wanting to trade, not wanting to use the money. It’s not just because the mass amounts of debt that continue to pile up. The biggest problem overall is this trust is dead. Trust has been failing for a long time.
As a matter of fact, the United States stole Americans gold in 1933. They defaulted on the gold they owed in 1971. I don’t know why there was so much trust there in the first place, but we’ve seen them steal Venezuela’s gold. The United States seized the funds from the Afghanistan central bank. I’m sure you guys saw, the whole world watched as the canadian truckers had their bank account seized for doing peaceful protests.
But really, as we’d say in the United States, they jumped the shark when they seized Russia’s money. So we had three superpowers in the world with nuclear weapons. Three. And Russia just had their bank account seized. So every nation in the world watched this and said, wait a minute. So if it could happen to Russia with their nuclear weapons, what chance do we have? Of course the answer is they don’t have a chance.
So they quickly have to start getting rid of their us treasuries, their us dollars, as fast as they can. Now, I know, I know, I know. For the dollar bowls that are out there, there’s no replacement for the US dollar. None of these countries have the deep liquid bond market. None of them have the correspondent banks. I get that. We’ll address that in a minute. But this is where we’re at.
Trust is dead. What do they do? We can continue to see how bad this has gotten. We have Edward Snowden who spoke here, everyone hopefully caught that, talking about the surveillance that our government has. Of course in China they have that and they’re not shy about it. They talk about their social credit score systems that they have. Of course, like I said, Russia getting put on blast, getting their bank account seized.
We can see that confidence is at the lowest level that it’s been in history since we’ve been tracking this in the United States, in Europe, in the south, loss of trust in institutions is over the lowest level it’s been in governments ever since. Now trust is very fragile. If you’ve had a business partner that you caught embezzling from you, you’re probably not going to do business with that partner again.
You had a wife, a husband, a partner that cheated on you, you maybe won’t trust them again. It takes a lifetime to build that trust up. It takes one time to destroy it and the trust is lost. So the question is, with all of this debt that we have, with the deglobalization that’s happening and the loss of trust, where do we go from here? How does the world move forward? And that’s the question that we want to address right here.
So where do we go? Well, if we had 5000 years of commodity money, we’ve been in this sort of semi quasi commodity money, fiat money system. But really 50 years into this current monetary order, 80 years in a US led order, but really 50 years in a paper money system, where do we go? Well, right now, the rise of the bricks meeting in August, they’re talking about going back to a gold backed currency.
Let’s go back to gold. It worked before. It’s been money for 5000 years. How about we do that. Okay, so that’s de evolution. Let’s deevolve. Let’s go back to the dark ages. That was pretty good, right? A time before technology. Let’s go back to rocks. That should work. And we’re seeing this happening as I already kind of showed you some charts. We’re seeing central banks buying more gold than any time in history as they’re dumping treasuries.
Now, I know for some of you treasury bulls out there, but wait a minute, mark, because the last treasury auction had record demand. Sure. From the banks in Luxembourg, sure. From the commercial banks, sure. Not from the southern banks, not from the global south. Didn’t come from China. It didn’t come from Japan, it didn’t come from Saudi Arabia or India or Argentina or any of those countries. They’re buying gold.
And more than buying gold, they’re stockpiling the commodities in the ground. OPEC says, hey, we’re just going to hold the oil in the ground. Why would we continue to pump oil out of the ground and then hold U. S. Treasuries? We’d rather just keep the oil in the ground. China has went and bought half of all the lithium mines in the world because they’d rather have the commodities in the ground.
In the United States, GM, General Motors, one of the largest automobile manufacturers in the world, spent $650,000,000, over half a billion dollars buying lithium mines. They would rather have the lithium in the ground than they would have the treasury. So the world is moving back towards rocks. We’d rather have rocks than the paper money. We can see the system is shifting. If you’re paying attention now, again, they can go back to gold.
So, to the point I was bringing up earlier, the dollar bulls would say, but mark, there’s no replacement for the US dollar. There’s no correspondent banks, there’s no deep liquid bond market, and those things are true. China, Russia, they’re not going to compete with that. There is no replacement for the US system. But they’re not buying a different country’s treasuries. They’re buying gold. The problem is, it already failed before.
We live in a information world today, we need money to transfer at the speed of our transactions over the Internet, and gold can’t do that. Gold requires trust. Since gold can’t transfer immediately, it requires someone to hold a ledger. And if someone’s holding the ledger, we must trust that person. But trust is lost. So if that doesn’t work, if we don’t go back to commodities, where do we go? Well, the next solution is central bank digital currencies, because that should fix everything, right? Remember, at the brick summit, they urged each nation to use their own currencies.
So we must need a central bank digital currency. We know there’s 131 nations, according to the BIS, the Bank of International Settlements, the central bank, above all the central banks, there’s 131 nations working on their own central bank digital currency right now. I’m guessing most of you guys have heard about them by now. We’ve been hearing a lot about them, and there’s one project in particular that seems very promising for them and maybe not so promising for us, depending on how you feel about central bank digital currencies.
And it’s called Project Enbridge. Now, Project Enbridge is a project that’s being done by the BIS, by the bank of International settlements, in conjunction with China, of course, but also Hong Kong, which is important because it’s sort of China’s gateway to the financial system, to the world. Also Thailand, sort of the manufacturing hub of Asia, and also the UAE, which is important because it’s an energy producing nation in the mideast.
All right, so Project Enbridge basically says, hey, each nation, go ahead and keep your own currency. We’ll just turn them into central bank digital currencies. And what we’ll do is we’ll create a hub that all the central bank digital currencies can come into, and we’ll automatically swap them out. This will be much better. Now, this isn’t just an idea. This is really happening. As a matter of fact, almost over half a trillion dollars has already been sent through the Enbridge system.
This isn’t just an idea. It’s happening, and it’s happening by some very big, serious players. So this is something that we should be watching out for. Now, if you’re not super familiar with what central bank digital currencies are, and maybe some of the problems that they may pose, we can just turn to Europe’s lagarde. She can tell us directly, except for, actually, I don’t have a video. So I’ll tell you what she said in this video.
They were asking her about central bank digital currencies, and they asked her about having some freedom to transact. And she said, we’re considering, we, the European Central bank, we’re considering whether for very small amounts, anything, $300 maybe. We could give you freedom with three or $400, maybe. And then she goes on to say, but actually, that’s pretty problematic, because even if we give you freedom with $100, she said that could cause a problem, she said, in France, all of the problems they had in France was because people funded it with small transactions under $100, not the $6 billion that we give to these other nations or $400 million.
We fly in the middle of night. No, your problem. That’s what she said. They want to control that. What about the rest here? I don’t know if you guys seen this guy, the head of the BIS, he was talking about the difference between a CBDC and the dollar. And he said the difference between a CBDC and $100 is that with $100 we don’t know who has it and who they give it to.
But with a CBDC we’ll know that. And he said the difference is with a CBDC we’ll have full and total control and we’ll have the technology to enforce it. And the final piece is in the UN’s goals, they have what’s called sustainable development goals. Go to their website on the UN, look at the sustainable development Goals, 17 of them. Number 16 is digital ids. Now, I know that there’s a big spectrum probably in ideologies here, and what we should be able to do, what we shouldn’t be able to do.
Obviously, from an american viewpoint, I look at the world probably different than a lot of you. But just ask yourself this question. If I have to ask for permission, if I have to be given permission in order to use money, what if they don’t give me the permission? What if they take my permission away? If I have to have permission to get an id, what if they don’t give me the id? Now for us in the west, it hasn’t really been a problem.
But let’s say that you’re a 13 year old or 15 year old kid that was born in Iran and there’s sanctions in your country and you’re not allowed to join the financial system. As a matter of fact, today in the world there’s over 2 billion adults that don’t have access to the financial system. Now this device right here, this smartphone has sort of equalized a lot of the world because anybody in the world can now jump on this, jump on YouTube, we can pretty much learn anything we want.
We can meet anybody we need to. We can solve problems. We can do commerce. And this has sort of equalized the world. If you can join the financial system, if you have permission to join the financial system. So the CBDCs seem to be the next logical step. But the problem is, I would call this not de evolution, I’d call it zero evolution. Because it’s basically the exact same thing that we have right now.
It still allows the central banks to print unlimited amounts of money. I already showed you the debt charts. How much more can we print? It still allows for unlimited inflation. We can’t even afford the cost of living right now. Millennials can’t even buy a house. It’s still going to cause this debt drag on the economy, which is going to limit growth. It’s going to limit progress, and it will still be a permission system that will still keep billions of people out of it.
So there’s no evolution. It’s zero evolution. It doesn’t fix any of the problems that we have. So it’s really dead on arrival. It’s not going to work now. They’re trying it. They’re going to try, but it’s not going to work in the United States. About half of the states already have put laws in place to ban it. We don’t want it. We’re over it. And it’s not just the United States, even Canada, which is going very quickly down this authoritarian path.
The Central bank of Canada came out with new information and said, it looks like the people don’t want it. We don’t see a need to put it out. Maybe we won’t put it out. Nigeria is a nation that tried to put it together in full force. Now, most people in Nigeria had already moved to bitcoin because the nigerian currency, the Nyara, was having so much inflation, they couldn’t afford to keep their money there.
So they were moving it to bitcoin. So the country of Nigeria said, oh, they must want digital money. So let’s give them this e Nyara. But nobody wanted to use it. They tried to incentivize them. Hey, we’ll give you discounts if you use it. Still, nobody used it. They said, the people of Nigeria said, why would we use it? It’s the same inflationary currency that we have right now.
We don’t want that. So then they tried the carrot. That didn’t work. They tried the stick, which is, let’s just take all the cash away. So they took all the cash away. They thought they could force people into the Enyara. That didn’t work, and the whole economy crashed. So they canceled the plans there. So again, it doesn’t fix any of the problems. Governments are still going to be incompetent.
They’re going to probably not be able to roll this out. So this doesn’t fix any of the problems. The reality is that if we want to break things down to first principles levels. We have to understand that solutions are supposed to come to problems. And I say supposed to because today, in a world where we have unlimited money printing, we have people trying to solve problems that don’t always need to be solved.
For example, today we hear about AI. It’s going to solve this. We’re doing this. So everyone’s taking this AI or this blockchain or fill in the blank with a buzzword and it’s going to fix this problem or this problem. But those problems don’t need to be solved. But there are real problems that need to be solved. So if we think about it, we have a lot of problems in this current monetary order that we have today, like endless money printing.
It’s a problem. So if we have a problem of endless money printing, then we need to fix it. We need a solution that has a fixed supply and doesn’t allow anybody to have endless money printing. Another big problem that we have is that there’s no transparency. There’s no trust, there’s no transparency. We don’t know how much money there is, how much debt there is. We don’t know what the interest rates are going to be tomorrow.
We don’t know how much more they’re going to print. We have no idea, nor do they even tell us the truth. In the United States in 2008, after the great financial crash, apparently they gave about a trillion dollars in stimulus. But in a FOIA request, there’s a request for actual information to be released. We found out it was almost 20 trillion over the course of a decade. There’s no trust, there’s no transparency.
So we need a system that’s open and transparent. We have another problem that it’s controlled by borders. We just talked about the BRICS nations and they don’t want to use this global dollar homogeny. They all want to use their own currencies now. So every nation wants to have their own currency. But how does globalization work in a world where we have all these different monies that are all these different values and each nation doesn’t want to trade? So it’s almost like we would need something that would be borderless instead of bordered instead of requiring permission to join a poor iranian kid maybe not able to join the financial system because of sanctions on their country.
We might need something that’s permissionless to join instead of something needing trust. How much gold do you really have? Do you really have the gold in your safe? Are you really going to send me the gold? Is it really going to be gold? Or will it be tungsten painted like gold? I don’t know. Instead of requiring trust on someone keeping the ledger, we might need something that’s trust.
The lists. Instead of in a system that has full control, we might need something that’s decentralized, with decentralized control in a globalized world. There’s one option that’s giving people global property rights all around the world. And of course, that’s bitcoin. That’s why we’re here at this bitcoin conference and in a multipolar world where we’re no longer in the current monetary order or the current international order that we have today, a US led order with A-U-S.
Dollar reserve currency in a paper fiat monetary system moving to a multipolar world. How does the world move forward when there is no trust? Are we going to go back into a world where it’s like, no, give me the money. No, give me the drugs. No, give me the money. Give me the drug? How do we do that in a world where trust is gone? It’s almost like we need a decentralized ledger that’s trustless.
And so in this new world order that we’re going into, the question is left, if not bitcoin, then what? That’s it. Thanks, guys. Guys. All right, that’s a wrap. Hopefully you enjoyed that conversation. It was a fun keynote to give over in Amsterdam. It was fun to meet a european crowd. It was a cool event venue. Let me know what you think. Leave a comment down below. Of course, as always, give me thumbs up if you like the video.
If you don’t, give me a thumbs down. But at least tell me why in the comments down below. Subscribe if you’re not already subscribed. And that’s what I got to your success. .
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