Abstracting the symbol of money.

 

Capitalism originated when the Netherlands, after accumulating wealth through trade with Spain, gained independence and established the Dutch East India Company, the first modern corporation, in 1602, and founded the stock exchange in 1612.

As a rival to the Netherlands, England emerged and led the first wave of globalization in 1875 by fixing its currency value to gold and implementing the gold standard, where the money supply was determined by the amount of gold held.

After recovering from war debts and recession, the UK withdrew from the gold standard in 1931, leading the United States to lead the second wave of globalization in 1935.

The US, which discussed making the dollar the key currency at the Bretton Woods conference, established the status of the dollar as the key currency through the Marshall Plan in 1947, leading the way for protectionist trade policies.

The US established the principles of the international monetary system by fixing an ounce of gold at $35 and pegging other currencies to the dollar.

The fixed exchange rate system allows for adjustments within a 1% range in principle, but allows for larger fluctuations in exceptional cases where there is an imbalance in the balance of payments.

The US had no burden on dollar issuance as it held enough gold through energy production and goods exports, but faced a crisis in the Bretton Woods system as trade deficits accumulated.

Key variables include a decrease in oil production, a sharp increase in accumulated debts from the Vietnam War, and the expansion of economic power in Europe and Japan.

 

In 1900, Frank Baum revealed “The Wizard of Oz” to the world.

“The Wizard of Oz” symbolizes the political conflict between silver coinage and the gold standard in the 1890s.

Dorothy, who lives on a farm in Kansas, is swept away to the land of Oz by a tornado.

Kansas is home to the “Western populists” who support the silver standard.

Oz symbolizes the gold standard and the supporters of the gold standard based in New York City.

Dorothy embarks on a long journey to find the Wizard of Oz to return to Kansas.

As a character representing pure Americans, Dorothy travels to the Western farmer Scarecrow, the ordinary laborer Tin Woodman, the leader of the silver coinage movement Cowardly Lion, and the Emerald City.

Grover Cleveland (22nd and 24th President: 1837-1908), a Democrat who supported the gold standard, is the Wicked Witch of the East.

William McKinley (25th President: 1843-1901), a Republican who introduced the gold standard, represents the Wicked Witch of the West.

Marcus Alonzo Hanna (1837-1904) lives in the Emerald Palace as a magician.

Hanna, as the main figure behind McKinley and the Republican Party, lives in the White House in the Emerald City.

The Wicked Witch of the West, seeking to kill Dorothy, the symbol of the gold standard, steals her silver shoes and divides her four friends.

With the help of Glinda, the Southern Witch and a supporter of the Populists, she escapes the crisis.

Dorothy returns to Kansas without her silver shoes.

 

In 1964, the 36th President, Lyndon Johnson (Democratic Party), discontinued the issuance of silver certificates, thus abolishing the silver standard.

In 1971, following France, the Bank of England also demanded gold, causing a decrease in gold reserves and a serious depletion of US gold reserves.

On August 15, the 37th President, Richard Nixon (Republican Party), abolished the gold standard by suspending the gold convertibility of the dollar and introduced a floating exchange rate system.

When the Organization of the Petroleum Exporting Countries (OPEC) recognized the dollar as the currency for oil payments, the demand for the dollar skyrocketed astronomically, making it the dominant currency.

By supplying dollars without limit, the dollar soared and became the dominant currency.

In 1995, the United States led the World Trade Organization (WTO) and spearheaded the third wave of globalization.

The dollar, which circulates along with physical goods, exercises comprehensive purchasing power and becomes a universal tool.

The dollar, denoted by “$,” is an abstract symbol that circulates with physical goods, representing a “piece of paper.”

Since it is a promissory note without a repayment period, the United States does not go bankrupt even if it issues it recklessly.

Although the trade deficit reached $1 trillion in 2023, the United States faces a recession rather than a foreign exchange crisis because the concept of foreign exchange itself does not exist.

To pay for goods imported into the United States, one simply needs to print dollars, which are pieces of paper.

 

The Federal Reserve, the Fed, America’s central bank and a key player in today’s capitalist system, is housed in the serene and elegant Eccles Building, located just a few hundred meters from the Potomac River in Washington, D.C.’s west.

It is the core of the global empire, the United States, determining the prosperity and downturns of the world today.

Serving as the high priests of this temple, Ben Bernanke, Janet Yellen, and Jerome Hayden Powell wield abstract money to control tangible goods, influencing human judgment and values.

Everyone is focused on securing abstract dollars to buy tangible goods in the United States and other countries, using paper notes brought in for goods and given out for goods, playing the dollar game where bringing in goods results in a trade surplus and bringing in paper notes results in a trade deficit.

During the bubble economy period, massive investments in production facilities led to chronic oversupply worldwide, leading to a struggle for dollars in the semiconductor, automotive, shipbuilding, and steel industries.

The United States, suffering from a collapsed manufacturing base and chronic trade and fiscal deficits over decades, ironically suffers from hypochondria. However, this has led to prosperity in Germany, Japan, South Korea, and China.

The U.S. trade deficit actually provides the world economy with a supply of dollars.

Currency crises around the world are based on the demand for dollars to accumulate foreign exchange reserves, leading to a resurgence in the value of the dollar.

Central banks around the world, aware of the attractiveness of the safe asset that is the dollar, strive to hold U.S. Treasury securities as their top priority.

The U.S. Treasury market is the most liquid single financial market in the world, and the U.S. government has never defaulted on its debt since 1812.

The dollar, the absolute trading currency in the international foreign exchange market, is so dominant that no other currency can compete.

 

 

The absolute dollar regime gives the United States a power of the key currency that no country in human history has ever experienced.

The cornerstone of the key currency that firmly establishes the dollar regime is the military power of the United States, which possesses the world’s strongest weapons.

The dependence of countries that have military alliances with the United States on U.S.-made weapons triggers demand for dollars, increasing the dominance of the dollar.

The United States, the loser of the global maritime power wielding the abstract dollar club, spends 44% of its total defense budget on the navy. The Air Force accounts for 85% of the navy budget, and the Army budget is at 75% of the navy budget level.

The power of the United States to dominate the world comes from the navy. The power of the navy is based on the ability to project military power over long distances and research and development funds.

Since the navy must engage in air, ground, and underwater battles, it invests heavily in research projects. The U.S. Navy, which owns 11 attack aircraft carriers, over 3,700 bombers, 10 amphibious assault ships, 22 cruisers, 55 Aegis destroyers, 30 frigates, and 75 submarines, is invincible.

All the world’s oceans, which the United States controls and protects with radars, sonars, and surveillance satellites, under a defense budget of $886 billion (in 2024), ensure the safety of international trade routes, generating trade surpluses for countries and enabling the United States to gain global status as the key currency.

By settling payments and payments with dollars in trade with other countries, the United States offsets the losses from trade deficits, capturing profits beyond that. It fills the trade deficit with paper dollars and virtually consumes goods and services from around the world for free, enjoying the status of a global empire.

 

​On December 13, 1935, the British economist Keynes wrote the preface to “The General Theory of Employment, Interest and Money.”

He broke away from classical economics, which championed Say’s Law, and presented the theory of Keynesianism.

He argued that the problem of unemployment arises from insufficient effective demand, so the government should stimulate artificial effective demand through public investment, low interest rates, and tax cuts.

He proposed realistic measures to overcome the Great Depression by considering total demand and total supply.

In fact, Roosevelt’s New Deal policies were implemented ahead of Keynes’s theory in 1933.

Keynes returned to finance and contributed to the establishment of the Bretton Woods system, but died during negotiations for the introduction of the British Chancellor in 1946.

Keynes’s intention of presenting short-term government spending to overcome the economic depression becomes distorted as a long-term and permanent solution for economic management.

Keynesianism, the precursor to GDPism, coexists with market economy and reigns as the temple of God Defend Prosperity.

 

In 1972, the U.S. dollar’s non-convertibility declaration was a magic wand that overcame the economic ruin caused by the Vietnam War.

When Milton Friedman’s monetary theory, which claims that increasing the money supply revives the economy, joined in, the worst policy combination was put into full operation.

In 2001, the U.S. reached the limit of quantitative growth, and the marginal efficiency of capital fell below the marginal cost. At a time when there was no longer any marginal efficiency of capital to land softly and manage deflation, they proposed the extreme remedy of quantitative easing.

They threw money around when the engine leading corporate investment hit rock bottom.

As Keynesianism, which aimed for full employment through active government spending to intervene in the market, faces its limits, it encounters challenges.

The Chicago school of monetary marketism, which attempted to resolve the fiscal deficit caused by government spending through unlimited issuance of the dollar, also reveals its incompetence in predicting current economic phenomena and future directions.

The current problem in the world economy is neither a lack of effective demand as argued by Keynesians nor a matter that can be solved by lowering interest rates and printing money, as claimed by monetary theorists.

Even if there is plenty of money in circulation, we are trapped in Keynes’s liquidity trap where money does not circulate.

For money to circulate, the problem of oversupply created by advanced and emerging countries must be resolved.

Instead of the economics of artificial and human intervention, we are moving closer to the natural economic mindset of the East, where intentional adjustments of economic phenomena are impossible.

Even if high unemployment continues, we are willing to accept inflation and deflation and leave it to the market’s autonomous recovery ability, even if it means everyone dies.

 

Laozi depicts an ideal utopia in Chapter 80 of the Tao Te Ching.

The country is small, and the population is sparse.

Even if there are ten essential things, they are not all used up.

Death is considered weighty, and people are not allowed to travel far.

Even if there are boats and carriages, they are not ridden, and even if there are armor and weapons, they are not used.

People bind their babies and use them as writing tools.

They enjoy their food, wear beautiful clothes, make comfortable homes, and delight in their customs.

Even if neighboring countries are within sight, and they can hear the cries of roosters and the barking of dogs, people do not visit each other until they grow old and die.

Laozi’s ideal utopia is in harmony with nature, as they are one with nature.

They live in accordance with their natural form given by nature.

They joyfully travel according to the four seasons.