What do You Get When You Optimize for Looks and Size?
If you answered plastic surgery, you are partly on track for this issue’s topic. However, today we are discussing US food production, and the epidemic of epi-pens and autoimmune disorders. If you are new to this topic, please stay with me. There is a book’s worth of information that we are going to brush over in the hopes that it may be helpful to yourself or someone you care about.

Many of these topics have been covered, but many of them have not been covered in concert with each other. Hopefully connecting some of these dots may shave some time off your journey of discovery if you are seeking this information. Happy New Years and apologies for my absence over the last five weeks, COP28, moving house and my day job have eaten all of my time and probably half of my soul.

Food Lobbies – Prioritizing Profits
When looking for a good place to start, following the money trail is always ground zero. The food groups that lobby congress are large organizations and due to economies of scale and the efficiencies of the US market, they represent massive food conglomerates. Simple questions like, “How much money was spent in food lobbies in 2022,” can produce baffling answers. Of the listed lobby activities, the top 35 food conglomerates spend $42.2 million dollars with 90% going towards lobbying, political campaigns and PR at respective portions of 40% / 30% / 20%. $22 million of the recorded lobbying events came from the beef industry alone. However, the actual numbers for buying influence are likely ten to fifty times this number when considering that the size of the US food sector is expected to have generated $2.39 trillion in 2023. If you are curious how powerful the food lobbies and industry groups can be you only have to look at the “fat-free” craze that was secretly pushed by the sugar industry, which contributed to an entire generation of obesity with the US government’s blessing.

The FDA – Too Weak to Beat the Food Lobbies, Too Political to Protect Us
In a world where big money rules, we at least have government watch dogs to help us out, right? Acts like The Honest Labeling and Deceptive Practices Act have been presented as having the consumers best interests at heart, yet its critics have brought to light that the act does not prevent false claims around health and nutrition. However, despite being a watered-down act, the food lobby still doesn’t like it and has repeatedly blocked the act since its proposal in 2021. To make matters worse, the FDA’s Attorney publicly declared in federal court in August of 2023 that its recommendations to the public and the government require zero scientific backing. This was determined when the judge asked, “Does it matter whether they (The FDA’s views) are scientific views or not… or whether they are just views,” to which the attorney replied “There is nothing in the multiple sources of authority that I cited that require the FDA to go through any sort of formal process.” The judge went on to ask what the check and balance mechanism was for the possibility of distributing ill-informed views to the public, in which the attorney answered, “The public can elect its government officials and the FDA can answer to those officials…It’s not the role of the court to fact-check the FDA’s scientific statements.” In this instance, the reason the FDA was in court was because they had publicly fought for the stance that Ivermectin was to be considered dangerous for the early treatment of Covid-19 as it was primarily used as a horse de-wormer. The reality of the drug was that Ivermectin had been used safely to treat humans for 4 decades, was listed on the essential medicines list of the World Health Organization, had been found to have significant anti-viral and anti-inflammatory properties in addition to its anti-parasitic properties and had been the vehicle for its discoverers to win a Nobel Prize in medicine in 2015. The problem was that its patents had expired, and it was in the realm of generic medicine so there were no profits to be made from it and trials were deemed “too expensive.” However, in March of 2022 the UK’s NIH issued the following statement in a meta-analysis of 80 studies, “…there has been shown a significant reduction in hospitalization…” and “…and in addition the cost is in order of 100 times less when compared to the newer drugs.” So not only did the FDA condemn a highly effective early stage covid drug, but they led the world to condemn one of the most cost-effective drugs for treating covid and possibly committed countless thousands to death while awaiting the vaccine. What else could happen under a weak FDA?

The “Episode Pens” Epidemic
In the last 15 years there has been a 245% increase in epinephrine pen prescriptions and a 1,350% increase since 1980. The increase in anaphylaxis allergic reactions has increased at nearly the same rates respectively over the same periods of time. Primary school teachers often have desk drawers with as many as a dozen “epi-pens” in them with names and notes on each child owner’s conditions. The beginning of the years often involves notes going out to other parents with messages such as, “Please don’t sent almonds to school in your child’s lunch or snack they could kill Thomas and Maya. Thank you.” Menus across the country now have symbols for common allergens such as wheat, dairy, nuts, shellfish, etc.., and in many cities these symbols have been present for over a decade now. These symbols have now also spread East, across Europe and are now becoming part of menus in larger cities in India. But, why now?

What is the Change, Why Now?
At the heart of these matters we are finding that there have been fundamental changes in our digestive processes, as well as the bacteria compositions of our guts. These changes have far reaching implications in our long-term health, have been brought about for many reasons and many seem to pre-date smartphones and even the personal computer. However, there are a couple of topics that seem to resurface repeatedly. The first is an agricultural chemical called glyphosate, which was commercially introduced in 1974 and has been part of the “better living through chemistry” experiment that we have used to grow our grains. The second is GMO based veg and fruit crops, which have also been part of the ”Genetic modifications for better living” experiment which was introduced to the US in 1994. Over the last 40 years these two smoking guns have ducked and dodged a number of accusations, but if you look at their adoption across the globe it can be seen that within a generation of consumming these products, that region’s population starts to show measurable change in allergies. Other aspects of the problem that are being found to play a role in this allergy epidemic are increased systemic stress levels, over prescription of anti-biotics to man and beast, and weird things that we didn’t think mattered, like C-section birth versus vaginal birth. However, before we connect all of this, a basic understanding of the gut may be required.

I Have Never Heard of the Gut Micro-biome
Over the last twenty years the research on the bacteria in our gut and our relationship with it has exploded and with each discovery it has been confirmed that there is even more that we don’t know. One source suggests that we have 40 trillion different types of bacteria in our gut while only having a total of 30 trillion different types of cells that make up our body. You may ask how something in our gut is not considered in our body. As it turns out, the tunnel from our lips to our rear is technically external to the skin boundaries of our internal body and the inhabitants of this tunnel are mostly helpful and crucial to our survival. When food is being chewed in our mouths, our stomachs are signaled on what type of food is coming and the relevant bacteria to the digestion of these particular foods are alerted. Sometimes within hours of this alert, dormant strains of bacteria replicate by the thousand for the task of digesting a rarer delight, such as eating your first oyster in a decade. However, problems can arise when we call these specific bacteria into service for digestion or to fight off a pathogen, but we have accidentally killed them off with antibiotics or over nurtured their competitors. The diversity of our gut bacteria is the ultimate Swiss-army knife for our health. This bacteria diversity in our guts, or lack of it, is part of the reason why one diet may work for one person and fail horribly for another.
Rabbit hole: Links to gut health and neurodegenerative diseases have been clearly established

You Are What You Eat, is Partially True
Whatever you eat on a regular basis will cultivate the corresponding bacteria in your gut. If you have spent a lifetime on sugar and booz, one can only expect that the bacteria that thrives on sugar and booz will be in great shape in your gut, but that the neighborhood that is typically occupied by the bacteria species that handle various vegetables and fruit may be a bit empty. The standard American diet mostly favors cheap wheat, cheap dairy and a great deal of processed foods. These dietary habits are set from childhood for most of us as foods like “Kraft Mac-n-Cheese” might as well have made up an entire food category for at least two generations of Americans. The results are that many of us may have got off on the wrong foot when it came to our gut bacteria with our diet. On top of that, other researchers think that our biodiversity starts even earlier.

Early Life and Your Bacteria
At a recent trip to the pediatrician a friend of mine asked his son’s doctor, “Why do my kids have so many Allergies?!” The doctor’s response startled him a bit, he asked, “Were their births naturally or via c-section?” You may ask yourself why this would matter, but recent research seems to confirm that a child’s first healthy dose of bacteria biodiversity comes from traveling down the birth canal. This trip exposes children to a wide variety of bacteria that often stay with the children for the rest of their lives. Following this trip down the birth canal some children are breast fed and some are not, here too, they are finding that the bacteria exposure and bacteria nurturing also varies for early biodiversity. In both cases there are work arounds to supplement and create artificial bacterial environments, and in the modern-day world we are thankful that millions of children are here today that would not have been with us without c-sections and formula. However, it is only now that we are starting to understand these different paths and their affects. The problem is that no matter how we started off as kids, most of us have worsened our conditions by eating foods that were traditionally ok to eat by the generations that came before us.

Why are Wheat, Corn and Soy Killing Me and What is Glyphosate?
In the US many of us know the product by its branded name Round UP weed killer. For years it has been the go-to weed killer that we have used to keep weeds away. The problem is that Round Up was also discovered to increase wheat, corn and soy production by as much as 20-30%. Wheat kernels are part of the plant’s reproductive system and what has been found is that whenever an organism’s life is threatened, biology speeds up the process of trying to secure the passing on of the next generation of genes. What this means for high yield crops, is that when 70% to 80% of the crop has matured, a farmer can dust the crop with glyphosate and cause the remaining 20-30% to rapidly mature and make itself ready for harvest as well. The process has made harvests far more productive, but this has come at a cost. Not surprisingly, baked goods created from grains dusted in a mild poison have caused trouble for millions of people across the globe. Even though the grains are plentiful and beautiful, the inhabitants of our guts aren’t necessarily ok with being exposed to the poison. Glyphosate has been banned in US and EU organic farming, but is still used widely in conventional farming despite Monsanto/Bayer paying out several billion dollars in cancer based lawsuits. Despite the many legal victories won against the product, the US EPA has determined that it was “not likely to be carcinogenic to humans” in 2019, and recently the EU has cleared it again for conventional farming as well.
Rabbit Hole: Search “grains, diet and developmental disorders” - many parents have found significant improvements to their children’s conditions by eliminating many of these grains.

The Fruit and Vegetables are Gorgeous, What is the Issue with GMO’s?
Genetically modified organisms are another example of man’s intervention with plants. Over the agrarian history of man, we have grafted different plants onto different root structures, we have systematically picked the plants that seem to grow best in different environments and as of our recent history we have started genetically enhancing various plants’ abilities to defend themselves from an array of pathogens and pests. I cannot tell you what percentage of these changes have been purely good or purely bad, but I can tell you that studies are growing in number that seem to suggest that we are having more and more trouble digesting these big, beautiful, colorful plants (or the animals that eat them) ourselves. GMO’s in particular seem to be being attacked by our immune system and causing inflammation responses. In both GMO’s and glyphosate, it appears that we have created foods that have been accidentally disrupting our gut bacteria, on top of the gut bacteria that we have been intentionally killing off for decades with antibiotics.
Rabbit Hole: Search Inflammation and GMO, example articles clearly show a link inflammation but the FDA stands firm that there is zero risk

Did You Know that Animal Farming Uses up to 80% of the World’s Antibiotics?
For years we have liberally and selectively been dosing ourselves with different strains of antibiotics to fight different illnesses, but most of us are not aware that the fish, cows, chickens and pigs that we eat have been consuming up to 80% of the world’s antibiotics as well. The label on grocery store meat “Antibiotic Free” is a favorite of mine, as it doesn’t mean that the animal was not exposed to antibiotics, it means that the animal was only slaughtered after enough time to metabolize the antibiotics that it was given to help it gain weight and survive in close quarters. As of February of 2020, there was not a single class of antibiotic that had not been given to animal herds around the world. In 2021a study showed that a casual trip to the poultry isle could result in possible exposure to countless strains of antibiotic resistant bacteria, as it was determined that over 50% of the birds on the shelves contain one or more of these microbes. When they say cook your meats and wash your hands, it’s not for fear of a tummy ache. The reason you should care about this mass abuse of all of our antibiotic classes, is that it means that there is an anti-antibiotic pathogen out there for every single antibiotic we have in reserve, and when you are exposed to one of these pathogens, that class of antibiotic will no longer work to save your life.
Rabbit Hole: Search “AMR Apocalypse,” but be warned it is not for the faint of heart

We Can Make New Antibiotics Though, Right?
The problem with developing a new antibiotic class is that it can take years of research to develop targeted and effective anti-biotics, but it only takes a couple months of abuse on a poultry farm for that antibiotic to no longer be effective in the humans that are exposed to the pathogens in that poultry. The combination of taking antibiotics for medicinal issues as well as ingesting them and their resistant strains of bacteria in our store-bought meats have introduced another level of complexity in our guts. For many of us this has resulted in the extinction of useful strains of bacteria in our own guts. The problem is that it is very difficult to determine which strains have been killed off and how critical they were for us. Unfortunately, this all seems to compound the problem around the growing allergy and in-digestion epidemic.

How Bad Can All of This Be?
Your autonomic nervous system in combination with your limbic system are responsible for many basic survival functions from fight, flight, freeze and other “f” starting words that humans seem to do regularly to the speed of our emotional cues on various life or death topics. These systems also help identify when it is time to rest-and-digest, which signals our gut microbes that it is time to work. These immensely important functions are all controlled in the background in a symphony of signals between the brain and the gut. Some of the signals that have historically taken place have had to do with the accidental ingesting of poisonous plants. The gut would then signal the body to stop al rest-and-digest functions and to expel and all problematic materials as a matter of survival. Historically these events occurred very infrequently, but we now have to cope with a new question, “What if a majority of the foods we consume are registered as a minor poison?”

Allergies - Now and Forever…
When I was growing up allergies were considered static. Definitive proclamations like, “I am allergic to ragweed,” or “Bill is allergic to tree pollen,” were considered permanent. It was understood that the sufferer was granted an unfair lot in life and that they were probably always going to sit at the table with other genetically inferior specimens of humans which gained nicknames like “Wheezy” and “Sniffles.” If you were lucky, you received weekly “allergy” shots for exposure therapy, if you were less lucky you were dosed on a daily basis with any number of medications that often made you think at half speed with the coordination of a baby giraffe during allergy season. Exposure therapy was based on the idea that being repeatedly exposed to the allergen in tiny amounts would eventually show your body that it wasn’t a threat. This principle for reversing allergies had been around for centuries but it required patience and a weekly pain tolerance threshold that sometimes bordered on self-loathing. However, when it came to food allergies, most assumed that not even exposure therapy would work, and that the sufferer was just horribly unlucky. Thankfully modern-day alternative medicine allergy reversal techniques are more dynamic and breed hope for allergy sufferers. As much as our understanding has changed about reversing allergies, many of us have also had to embrace an understanding of gaining allergies as well.

The Unsophisticated Bank Guard
Later in life I came to understand that not only could we get over an allergy, but we could also gain an allergy. My mother became allergic to shellfish, and I gained my fair share of new allergies as well. A naturopath did their best to explain the situation and used the following simple analogy. Your allergy response mechanism can be likened to an unsophisticated bank guard. If the bank gets cleaned out in a robbery, the guard will identify occupants in the bank and register them all as possible threats. If the robbery was horrible, all occupants will be considered definite threats. If the robbery was less traumatic, all occupants will be suspects; and if the same suspects find themselves in the bank during another robbery, they will also be considered threats. In this analogy the “robbery” was an inflammatory event. In most food allergy cases our bodies our under stress and having trouble digesting something at the same time. Extreme stress with the same suspect can create an allergy. In an extreme event, multiple allergies can be created all at once. Example: A friend left her office to pick up lunch at a Subway, her cubical was sprayed with pesticides while she was away, she came back and ate her sandwich, but shortly after finishing she had a violent reaction to the pesticides that required hospitalization. Once out of the hospital, she came to realize that she had become allergic to everything in her sandwich. This is an extreme example, but these days the stress events seem to be registered more regularly, providing a constant level of stress for the body to never recover from; especially when the food we are eating is now also part of the stress. So, what happens when the bank gets robbed every day?

Autoimmune Disorders, Allergies and Diet
Autoimmune disorders, or “no-mans-land” for western medicine, are extremely tricky situations and are on the rise. In 2022 it was estimated that autoimmune diseases were rising by 3% to 9% a year globally and showing up in countries that they had never had significant prevalence in. The extreme version of these diseases are characteristically defined by people stating a version of one of the following statements; “I have been to several specialists and they say it is all in my head,” “The tests say I am fine, but obviously I am not fine, as I can no longer _____,” or “I used to think I believed in science, but this witch doctor seems to be the only person that has made it possible for me to live a normal and functional life.” Most autoimmune disorders also seem to snowball and accelerate quickly. On the digestive front, if the body is under constant stress, it never allows itself to “rest-and-digest” which means that the person’s nutrition drops substantially. This compounds the stress on the body and can facilitate gaining mild allergies, adding to the overall problem. Traditionally many of the initial events were often thought to be an unprocessed large emotion or an environmental issue such as exposure to mold, EBV or Lyme’s; but the sharp increase in autoimmune disorders lends itself to the hypothesis that our daily diets may be encouraging this growth. The problem is that once this unhealthy flywheel starts turning, poisonous foods and the body’s tendency to reduce digestion under stress compounds everything and it can be very hard to regain a normal healthy state. I have read extreme cases where a person is eventually only able to eat rice and broccoli, or they must avoid 90% of the foods that they used to eat, but in most cases these kinds of diets are only temporary. The multi-billion-dollar question is, Did our modern day foods initiate the autoimmune issues, or did the autoimmune issues initiate the digestive issues? In either case, how can you remove yourself from a continuous stress loop.
Rabbit hole: Search “Autoimmune disorders and Allergies” – immune response regulation

Disclaimer
***The following is not medical advice, this is strictly discovered information over the last two decades that may, or may not, be of use. I have no medical credentials and claim no authority in this space. I am just another seeker of knowledge that unfortunately needed to study in this direction for my own personal reasons.***

How Do I Slow This Train Down?
There seems to be a couple of standard answers that work for larger groups of people, but it is important to know that there are no silver bullets and some damage cannot be reversed. That said, I think I read somewhere that an ailment is considered “permanent” in western medicine if 18 months of therapy has no significant affects towards reversing it, which is laughable, as the path to recovering from these types of issues regularly take longer than this time frame.
The time required for recovery may be a mystery, but the generic path to recovery goes as follows for most:
- The first step that seems to help is some form of dietary stabilization that is designed to slow the negative spiral down, rebuilding the gut and starting a new dietary journey from there.
- The second step is to identify the likely stressor that may have triggered onset of the issue or slowly built up the problem, and dealing with or removing the negative stimuli.
- The third step is resetting the nervous system and rebuilding a life around a healthier environment and healthier life habits.

No matter where you are starting, it is important to find your people and in particular a trusted guide to start this journey. For many of us this typically means finding a health practitioner that may be less aligned with a strict western medicine background. However, at a growth-rate of 3% to 9% autoimmune disorders are getting more press now than ever before and are becoming more mainstream. The first step that many people have success with is an IgG, IgE and IgM allergy tests. These tests sometimes do a better job of identifying foods that you may have an allergic reaction to hours or days later. Some of you may find that your trouble foods were consumed a full two days before your daily symptoms show up. Once you are on the elimination diet program, the will-power game has begun, as some of these foods not only have to be avoided, but they may have to be avoided for a month before you show consistent benefits from being away from them.

In my own story I took a standard food allergy prick test and was told that I only had a mild allergy to green beans. At the time I was using an inhaler every four hours and waking up a couple times a night desperate for air. Three months later I took a more thorough allergy test. The results required that I cut out wheat, dairy and refined sugars, among other things. Once I got used to the diet, I lost track of all of my inhalers and was able to take on aerobic activities.

Elimination Diets, The Water-Glass Theory of Inflammation and Allergies
Many allergy sufferers are operating in a perpetual state of high inflammation. Unfortunately, this means that any additional issues that are experienced can cause a noticeable reaction. The value of a restricted diet is that it often lowers the base-level of inflammation to the point that the person may gain some tolerance for other minor inflammatory triggers. This is known as the water-glass theory of inflammation. As long as the glass isn’t full to the brim, you can add and take a little water here and there and not really notice it, but it the glass is full to the top, every drop added, is noticed. An example of this is that my wife has a mild allergy to dairy, but as long as she only consumes it on occasion, she may get away without even a sniffle. However, if she adds a little milk to her coffee when she has a cold, she is likely to spend the rest of the morning miserable. There are so many inflammatory triggers and issues out there, unfortunately for those who love their food, diet is one of the few inputs that we have the ability to clearly control and is the first line of defense for reducing overall inflammation and starting the heeling process. Once a person is on stable footing with their diet and symptoms they can start to reintroduce foods back to their gut to see which foods they may still have intolerances for.

Rebuilding the Biome
Once a person has stabilized their diet it is important to try and “nourish the gut.” This often involves taking on activities like consuming collagen sources to repair gut lining, and eating fermented foods and fibers to rebuild better bacteria populations in the gut. There are countless resources on this process and again there is no silver bullet. If you find yourself reading this and in great shape, a “money in the bank” activity is to start or increase your dietary fibers and foods that increase your gut health.

Identifying The Big Stressor
For some people the answer to this question may be eliminating the foods we have discussed in this article, or other foods that don’t work for them. For others it will be work, relationships, traumatic events, pathogens, medical procedures and any number of other possible unfortunate situations. The primary value of identification is to eliminate it if it is still ongoing and persistent. If the big stressor was a past event the person may need to find a way to make peace with it. If it was a past environment, they may just need to make sure that they are no longer exposed to it. Many will heel without ever knowing what caused the issue in the first place. For those that need to identify the event this is often the domain of quieting the mind and working with various professionals to have an honest understanding of the situation and how it started the journey that they are now dealing with. For some this may involve working with professionals such as functional medicine doctors, environmental specialists or psychologists; for others it may just require pen, paper and time. Once the big stressor is no longer a stressor and the day-to-day inflammation is under control, some may still have another step if things aren’t getting better.

Resetting
Some people need some form of “resetting” of the system. Once a nervous system has been operating for a prolonged period of time in an alternate state it often has trouble making the jump to another state, even if that state is considered “normal.” Books like Toxic by Neil Nathan discuss different modalities and therapies for nervous system resets. For those that do not have the time for reading a book, searching topics around vagus nerve tone and conditioning can be useful. Many others have successfully turned to eastern medicine. Whatever seems to work is fair game when it comes to this topic, it’s just important that forward progress is being made.

Ending on A Positive Note
Many sufferers in this game will find themselves on fairly restrictive diets. Many of these diets will involve avoiding major inflammatory food groups for extended periods of time. For what it is worth, being forced to avoid these foods may be a blessing in disguise when it comes to other major illnesses that set in later in life. They have found many links to gut health and neurodegenerative diseases. One can only hope that there is a trade-off for avoiding your favorite foods, at least this is what I have been telling myself.

5,000 words is a bit long for most to read in a sitting, but for anyone who may be starting in on the “inappropriate immune system response” rollercoaster it is possibly far too little. I know this is a very different article than what I typically write about and I apologize for the change up. My trust in government ineptitude is still the same, I just took it down a different path this time.

Christopher LaBorde
The Keyboard Chimp

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Christopher LaBorde, his wife and their two children live part time in the Middle East and part time in Louisiana. As a curious engineer and novice researcher that studies a multitude of topics, Christopher always welcomes feedback at Chris@silvertrading.net and www.TheSophisticatedChimp.com. All of Christopher’s writing is made possible by The Silver Trading Company www.SilverTrading.net , +1 (318) 684-4272 please allow them to help you with any of your precious metals needs domestically or abroad.

The following day a temporary cease-fire was brokered. A month after a UN General Assembly meeting voted on a Humanitarian truce, a week after the UN instructed the need for Humanitarian Pauses and 12 hours after a Russian President explained that the US is destroying peace; the bullets will stop for increments of 24 hours. The accusation was that the US was killing people and destroying all options on peace by monopolizing diplomacy for their own interests. Putin’s timing, audience and framing for this statement were that of a master chess player. Its moves like these that have left Biden looking more confused and bewildered than ever.

Securing the Destruction of the US - Saudi Relationship
The Biden administration was trying to broker the Israeli / Saudi peace deal to bring the Saudi’s back to the Western side of the table after a disastrous destruction of the US-Saudi economic support system. At the beginning of his campaign for president, Biden failed to recognize the potential power Prince Mohammed Bin Salmon was amassing and the new position that Saudi was taking in the world. Biden’s understanding of his mistake and the resulting claw-back mission over the course of the last nine months has been a heroic but transparent effort. Progress was being slowly made but not everyone was happy about it. It has been speculated that Iran wanted to make sure that the bonds stayed broken between the US and Saudi enough for them to have served as the intelligence behind the Hamas attacks of October 7th. The attacks and the US response to those attacks formally ended all peace negotiations between Saudi and Israel and turned MBS back into a free agent with minimal ties binding him to the US. Putin’s declaration has skillfully insured that this status is more likely to stick and all he had to do was wait patiently and grab the microphone at the right time.

The US Dollar is Conditional
When the US issued sanctions against Russia after its invasion of Ukraine the US was choosing to not honor Russia’s efforts to spend its US dollar holdings. If this was any other currency that may have not been a big deal, but since the US dollar is the reigning global reserve currency, this sent a very tricky message. The message was that the US dollar is the most stable form of currency in the world, unless you disagree with the US. While the West was cheering the bold move to freeze the Swift System and hit Russia where it counted, Russia was making sure that everyone outside of the G20 understood that their dollar holdings are conditional. Since the Sanctions were put in place, 22 nations have applied to join the original five BRICS nations. If all applicants are accepted, the BRICS nations would have control of 78% of the global oil reserves and 36% of the global GDP, a 6% larger GDP share than the G7. Again, Putin’s move wasn’t even the aggressor’s move, it was just a careful move in response to a US led counter attack.

The Petrodollar
Another byproduct of the sanctions was the pricing of oil to China in currencies other than the US dollar. If at any other point in history Russia had decided to price oil outside of dollars, the US would have considered it an act of war against the dollar. However, since the US had issued sanctions that forced Russia out of the dollar, Putin had no choice but to price oil in dollars. The door has now been opened and it appears that the BRICS nations are cautiously finding their feet on this one. It was another display of how the US gave the appearance of failing to see how their moves were going to enable a counter move that may have much larger and longer lasting impacts.

Breaking the Energy Supply Line to Europe
Long before Russia invaded the Ukraine, the US had made declarations that the Nord Stream pipelines were bad for the US. Whether or not we crippled them or supported their crippling, it was not a comprehensive win. The twelve months that followed the destruction of the pipelines were the most volatile months in the history of natural gas trade, and none of those prices were lower than prior to the event. Even with the loss of their pipeline, Russia was still selling gas through LNG container ships and possibly making up the drop in volume with an increase in pricing. On top of that, despite Russia’s ties with Iran, the sanctions and the pipeline destruction have brought Russia and Saudi closer together in the OPEC+ relationship. So much so, that Russia has been exploring sharing nuclear energy technology with Saudi, the very thing that the US was trying to use as the incentive for Saudi to continue peace conversations with Israel. This is an example of yet another chess move Russia has made to reduce US leverage.

Many of these small moves may not seem significant, but its a program of death by a thousand cuts. And while the US is still the most powerful player on the block, we are not impervious to the actions of others. The fact that the diplomats of the arab world traveled first to Russia and China last week to lobby for the UN vote on the humanitarian pause is telling. In the last three decades you were either in the good graces of the US or not. In the last two years the birth of a second option has come about at a time when those that are not in complete alignment with the West are looking for one. This second option doesn’t have to have all of the options to grow in power, it just has to be big enough not to fear the US, and Mr. Putin is playing an extremely nimble game to build this alternate alliance.

The trouble with all of this is that each one of our large moves to intervene in international affairs seems to both drain our finances and provide an opportunity to strengthen opposition against us. The international legacy we are leaving for our children is one that is being shaped by a dollar that many countries are looking for alternatives to. As I write this, the spot price of gold is very close to breaking its six-month high, and I am not the least bit surprised.

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Christopher LaBorde
The Keyboard Chimp

Christopher LaBorde, his wife and their two children live part time in the Middle East and part time in Louisiana. As a curious engineer and novice researcher that studies a multitude of topics, Christopher always welcomes feedback at Chris@silvertrading.net and www.TheSophisticatedChimp.com. All of Christopher’s writing is made possible by The Silver Trading Company www.SilverTrading.net , please allow them to help you with any of your precious metals needs domestically or abroad.

In the early 19th century all banks in the United States, with the exception of the 1st and 2nd National Banks, were State chartered banks. In the frontier states, some of these banks were called "wildcat banks,” because they were managed by unscrupulous men and were often located on the edge of civilization. These men would obtain a state bank charter, issue their own notes, spend these notes and then make it nearly impossible to redeem them. Each state’s charter still required that the notes be backed by gold, so a game of hide-n-seek was set in motion. This brand of banker would often locate their “bank” in a small unheard-of town on the edge of the frontier amongst the wilderness and proceed to generate notes that would eventually be deemed worthless. Their reputations would quickly catch up with them and they would not last long. They were not prolific in number, but it only took a few to make life more difficult for the sound bankers in the state.

These dishonest bankers’ role in history was to serve as the fuel for the men pushing for the mandate of federally chartered banks. Opponents to state-chartered banking never missed a chance to discredit these banks by lumping them in with the practices of the wildcat bankers. Despite these accusations most banks handled their money quite well. Most kept 20% or better gold reserves in-line with the recommendation of Thomas Paine, an English American intellectual of the time and author of Common Sense and The Rights of Man. These banks all issued their own notes. Of their own designs, on their own engraved plates. There were a multitude of different paper note designs, sizes and denominations. Most banks circulated their notes in their immediate area to be fully redeemed at any time, but as they say, a couple bad apples can spoil the whole bunch.

The wildcat banks were famous for over printing notes and purposely circulating them far from their banks, where redemption would be difficult. However, the system of the day dictated that the further the bank note traveled from the issuing bank, or the more obscure it was, the more it was discounted. "Reporters" and "Detectors" were publications describing suspect and counterfeit notes from failed banks. The information was circulated for the benefit of merchants and bankers who were asked to accept out of town notes unfamiliar to them. It was an imperfect system, but it functioned with its own checks and balances.

Whenever merchants had several unfamiliar notes, they went to a "shaver" who purchased the notes at a discount. These notes were then loaded into a carpetbag and brought to the bank for full redemption. Finding obscure banks and bankers had an entire cottage industry of players around it with their own interesting stories. One of the more charming accounts of wildcat banking that I have come across is the story of a shaver on the hunt for the Bank of Morocco.

The Bank of Morocco was born to an enterprising banker who obtained several bank charters from the Indiana State Legislature. He gathered a list of obscure towns that had been recently platted in remote county courthouses and set up banks and partnerships in each of them. One such town that nobody had ever heard of was Morocco, Indiana, a town that would only be known on the most recent of maps.

A very determined shaver purchased deeply discounted notes from the Bank of Morocco and set about to redeem them. He visited the State auditor's office, and they could only tell him that the Town of Morocco was in Newton County. He traveled by train, stagecoach and rented horse. At dark he finally happened onto a small settlement in Newton County that only contained a few cabins and a blacksmith shop. The shaver asked for directions to Morocco and was informed by the smithy that he was there, but when he inquired on directions to the bank, the blacksmith became defensive. Finally, after much verbal fencing it was determined that the blacksmith was the banker but that the bank was closed for the day and would not reopen until the next morning.

The shaver ate dinner with the blacksmith and his family but had to spend the night on the open plain to await the bank opening the next morning. The next morning the blacksmith led him to a small cabin and they went inside. The shaver was then told they were inside the Bank of Morocco and to state his business. The shaver then pulled out the $1,000 worth of bank notes and asked for redemption in gold. This round of hide-n-seek had just been won.

The blacksmith carefully counted out the notes and then went over to a barrel filled with potatoes and carefully removed the potatoes. From the bottom of the "vault" he withdrew a sack labeled $10,000 and counted out fifty gold double eagles. Afterwards he placed the notes in the bag along with the remaining gold that backed the entirety of the outstanding notes and carefully placed it back in the barrel sealed under the potatoes, thus locking the vault of the bank of Morocco. The shaver thanked the banker and asked if he could pay for his meal the night before. The blacksmith/banker told him that he was the only customer to ever find the bank and that if he did not reveal the location to anyone else that his meal the night before would be free.

As tricky as the boutique banking of the early 1800’s must have been, my father often explained to me that banking used to be an extreme privilege, entrusted to an honorable few.  Their knowledge of people and business allowed them the ability to leverage their assets, capital and brand to create money and value out of thin air. This power was always going to be abused by some on smaller levels, but it virtually mandates abuse at larger scales.

From the time of wildcat bankers until now, we have traded the fear of possible losses in purchasing power of small boutique banking notes for being captive to mega-banks with guaranteed losses in purchasing power of our only note. Somewhere in the middle was a better system.

As a proud Louisianian I am compelled to note that in the early 1800’s that only the notes from the great Citizen's Bank of Louisiana in New Orleans were accepted at full value anywhere in the country. The Citizen's Bank of Louisiana was a commerce giant for the entire Mississippi valley of the US and issued the famous ten-dollar notes printed in English on one side and French on the other. These ten-dollar notes in French had a prominent "DIX" for ten on one side and were known as dix’es. New Orleans and the surrounding area became known as dix’es-land, which became “Dixie.” The first verse of the song “Dixie” was originally, "I wish I was in the land of dix’es.” A good reputation and solid business practices were all that was needed for the universally held value of a note, unfortunately these lessons were lost and the US was still in store for the creation of two privately owned national banks, we now call the second one The Federal Reserve. Though this is another story for another time.

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Written By: Larry LaBorde

Edited By: Christopher LaBorde
The Keyboard Chimp

Christopher LaBorde, his wife and their two children, live part time in the Middle East and part time in Louisiana. As a curious engineer and novice researcher that studies a multitude of topics, Christopher always welcomes feedback at Chris@silvertrading.net and www.TheSophisticatedChimp.com. All of Christopher’s writing is made possible by The Silver Trading Company www.SilverTrading.net, please allow us to help you with any of your precious metals needs domestically or abroad.

Propaganda machines have been an integral part of governments and conflicts since the first government existed, but the new mediums have truly changed the game. The effectiveness of these machines has to do with how easily our emotions can be hacked to override our ability to think through situations rationally, and these new mediums specialize in decreasing thought. They specifically take advantage of our evolutionary delays in brain development and how our ability to think is far more advanced than our ability to process those thoughts. The result is that skillful messaging targeted at our emotional processing centers can easily by-pass our abilities to consider other aspects of an issue. For all the good and awareness that social media has brought to us, foreign propaganda has also been given direct access to our feeds. If other countries can use it to influence US elections, can it be used as a weapon against the US government and the US dollar?

Elephants in the Room
Here are the definitions that will be used for some of the more critical terms in this article.
Woke: An African American Vernacular English term for the awareness of racism, expanded in 2010 to include sexual and sexual preference discrimination, expanded in 2020 to include the awareness of all left leaning politics, expanded again in 2023 to reference anyone who has genuine awareness of any form of inequality.
Wokeism: The behavior and attitudes of people who are sensitive to social and political injustice.
Cancel Culture: The practice of withdrawing support from a public figure or brand after they have done or said something considered objectionable or offensive.

The answer is, Yes, Wokeism is being weaponized against the dollar by other countries, but there is not a straight line to that answer.

The Beacon on The Hill
US society is built on the core principle that each human life is to be valued equally. This principle is why so many have flocked to the shores of the US and why it is so troublesome for people outside of the US when it falls short of this promise. Equal rights and equal treatment of people is a core part of what we are taught it means to be an American. The awareness of how various groups are being treated unequally is therefore a requirement for being a “Good American.” So how could wokeism be weaponized against the US if it is a core duty of its citizens.

An awareness of troubles is a requirement to understand the world, but using our desire for that awareness of troubles, is an exceptional way to control a human being. Part of the reason we are named The Sophisticated Chimp is that chimpanzees, like humans, are pre-wired to be interested in learning about threats before making their next decisions. This evolutionary bias towards being interested in troublesome events has taken care of us very well from the beginning of mankind, but in recent times its utility versus its harm has become debatable.

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When a Little Becomes a Lot
There is a variation of an Oscar Wilde quote that says, “If you want to destroy a man, give him everything he ever wanted.” Too much of anything can be a bad thing and unfortunately our brains are still programmed to deliver dopamine rewards for many things that will kill us. Sugar, heroine, gossip, pornography and endless scroll social media exploration are all things that our brains reward with dopamine. They are also all things where the lethality is in the dose. Granted, a little heroine in modern times has never been considered ok unless you are a Sackler, but in pop culture a little of everything else on that list is acceptable, if not celebrated. The problem is when the dabbling becomes out of control and the dose is larger than we were designed for, even when it is just “a little” time on our phones.

The Social Dilemma
For those of you who have not seen the 2020 documentary The Social Dilemma, it is time to watch it. My poor wife was subjected to a normally soft-spoken version of me yelling at the screen in agreement the first time I saw this film. As a person that falls somewhere in the Neuro-atypical spectrum, I find myself more susceptible to social media addiction and this film did a beautiful job of connecting some of the dots of a puzzle I was chewing on. There was a single thought in the film that crystalized it all when it stated that artificial intelligence doesn’t have to figure out how to do profound tasks to be a threat, it just has to figure out something as simple as which videos to feed our profile to get us to watch an additional second of YouTube each day. This type of thing can be achieved with basic learning algorithms, but the outcomes are far from basic, as none of us would consider the possible loss of our democracy “basic.”

How Can Even the Simplest Selection Algorithm be Complicit in a War?
The documentary went on to suggest that since the widespread adoption of social media there was an absolute disappearance of middle-of-the-road politics. Let me repeat this again, since the introduction of basic unsophisticated selection algorithms designed to keep us on social media for additional seconds, the US and the rest of the world have taken off on a path towards extremist politics. Unfortunately, the answers that the algorithms came to, was that if you feed viewers polarizing information you will gain more than seconds, so that is what all of the selection algorithms went on to do.  This wasn’t new information; this was just the first time that an individual could have this information almost personally cultivated for them. Years prior, this principle had been decisively confirmed by a legend in cable broadcasting.

24-hour News Will Never Work!
Ted Turner, the founder of a 24-hour news network named CNN, was right when he founded the news channel on the contrarian idea that viewers would watch news 24 hours a day. People told him that he would go broke because no one cared about the news that much, but Mr. Turner understood that humans are given dopamine rewards for studying threats or coming across polarizing information. So, as a great businessman, he gave us exactly what we “wanted.” From 1980 onward, he, and others, supplied multiple cable news channels designed to satisfy our addiction to threat identification while simultaneously outraging us and taking advantage of our heightened stress levels through advertising.

Social media took Mr. Turner’s discovery, put it in our pockets and personally tailored it to each and every one of us. Artificial intelligence never needed to be smarter than the smartest side of being a human to derail society, it just needed to stumble across the patterns of our extremely hackable limbic systems, figure out the buttons to push and then sit on them. The result has been that all of us now have an unlimited source of pain or outrage for humanity that we can tap into at a moment’s notice.

Just How Connected are We?
On top of easy access to “bloody news” many of us have also developed a deep seeded fear of missing out that also contributes to the average American adult opening our smartphones 96 times a day. Even as early as 2013 in a study of heavy smartphone users, it was found that the loss of a smartphone was registered in the same part of the brain as the loss of a limb, which goes a long way to explain how deeply dependent our brains have become on the stimulus that these devices provide. When you combine our anxiety of the fear of missing out on information with a constant access to the pain that others are experiencing you have a recipe for intense stress disorders around the more woke oriented members of our population. This prolonged anxiety and stress is often handled by our most primitive of tools in our stress management arsenal, the equivalent of the “blunt force make-it-go-away” tool.

The Origins of Cancel Culture
Whenever additional lumps of stress are added to people in these heightened states of stress, there is no room for nuanced navigation, they simply must go away. In the wild, highly stressed animals attack, and even the most domesticated dog in a new environment can become aggressive. The reason for this is because there is a short circuit in our limbic system “lizard” part of the brain that only allows for critical thinking when stress levels are low. When the stress levels are well past the thresholds of the limbic system, the default becomes to fight, flight or freeze before the threat. One of the problems with this state of being, is that even if the person is ready to fight, they have often, ironically, become easy to manipulate, as they are now an individual who no longer has the capacity to make decisions rationally.

This exit from rational thinking cause decisions to weighed in over simplified ways against survival, which makes us very susceptible to simple messaging of good versus evil. What is being found is that our constant bombardment of anxiety and stress from our smartphones can artificially trigger these sustained high levels of stress. What is worse, is that is that besides stripping nuance out of discussions, we seem to register anyone that mentions sensitive topics as a threat to our survival, meaning that all political satire that has traditionally been used to open up dialogues becomes canceled. The way that this becomes dangerous for a society is that there are entire teams of people that are employed for conflict propaganda, that look for this level of stress malleability in populations, or try to create it, to manipulate it.

Do Propaganda Teams Really Exist?
The Internet Research Agency (IRA), National Internet Information Office (NIIO), Global Engagement Center (GEC) and The Ministry of Strategic Affairs (MOSA) are the respective names of Russia, China, The US and Israel’s social media propaganda arms. These teams are made up of their country’s best social scientists, advertising specialists and social media marketers. Each of these teams are in charge of delivering their government’s version of the truth. Some of their campaigns are continuations of messaging that has been cultivated over decades and some of their campaigns are designed to sway favor for immediate threats and conflicts. The crisis management arms of these teams are on stand bye in the same way that many doctors are on call. The stakes for the games they are involved in could not be higher, in that they shape the way a country’s people may be in support of a war effort or a candidate, or not. The thought that these teams do not exist is naive but the thought that the work of these teams is not reaching us is laughable. These teams are now the most economical way to fight a war or win an election and we are their targets.

The predecessors of these teams were used in Germany for WWII, India and Pakistan for the division of greater India and even the US versus the US in the Civil War. In each of these cases unheard of cruelties and crimes were fueled by the moral high ground provided by the propagandists. Later during the cold war era, the Soviet Union became talented in successfully stirring up trouble for the US and dragging it into external conflicts. Its sole purpose in these missions was to cause the US to engage in conflicts and slowly drain the US’s coffers as wars are expensive. Throughout history the best of these propaganda teams used highly emotional messages to target stressed population segments in a frenzied state. The primary objective was to always cause the “stressed” to stop thinking and to cause the thinkers to pause. With these simple directives acts were committed in wars that the history books dare not print the horrors of, and the fortunes of nations were turned.

How is Today Different?
In conflicts in the past, these teams have always had to “warm up” their audiences. They have had to write stirring speeches, host rallies and show countless images of horrible things to bring their target audience to a frenzy. However, in our modern-day social media hyper-aware reality, many of us live in a continuously primed and frenzied state. On top of an astronomical rise in anxiety disorders, this translates to a very malleable US population that is ready and more susceptible to skillful messaging from external or internal bad-actors around the clock, and this hasn’t gone unnoticed.

In the last 8-years, US intelligence sources have determined that Russia influenced the 2016 presidential elections, China spread false BLM and covid campaigns, and the Ukraine, Palestine and Israel all used A.I. generated images for the purpose of swaying favor. The bottom line is that the propaganda teams of other countries have one job, to make sure that their country’s message becomes a deeply emotionally rooted message for the purpose of their teams needs. The problem with this is that the US and much of the West are very poorly equipped to handle the delivery of highly skilled propaganda messaging into our social media feeds, as questioning mainstream narratives is repeatedly being framed as Evil in the Good-versus-Evil campaigns. This means that our trained compliance with our own government’s messaging is translating into compliance with subverted messaging as well. Not only is this dangerous for the future of the US, but halting the process of thinking for yourself is fundamentally Un-American.

Summary:

• Propaganda machines have been around since the first government

• As humans we are predisposed to paying extra attention to anything that could be considered dangerous to us or polarizing

• Social media and smartphones have been combined to make a lethal cocktail of continuous stress

• People are easily manipulated when stressed

• The US and Western populations are pre-stressed and extremely susceptible to skillful propaganda attacks from bad actors

Predictions:

• Social media will play a larger role in conflicts than the actual bombs and bullets going forward

• The US will lose its identity if the average social media consumer remains extra-ordinarily stressed

• The US people and the US dollar will be skillfully pulled into conflicts that it will not be able to sustain

What Can We Do?
The answer to this problem is a very difficult one. On a personal level it requires booking large portions of time away from social media, installing applications that prevent different addictive behaviors on your phone and reaching out to friends to have in-person challenging multi-viewpoint conversations. On a government level it may require writing your representatives to state that you are in favor of bills that remove phones from schools and encourage mandatory breaks in continuous scroll. It also requires that we do our own research away from social media on the topics that matter to us.

The ultimate irony in all of this is that in our quest to become more aware of the harms to others, we have conditioned ourselves to be puppets of governments that might want to harm us!
How will this ever be written in a history book!

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What is the AMOC
The AMOC stands for Atlantic Meridional Overturning Circulation and is the “engine” for a conveyor belt of ocean currents that regulate the Atlantic’s temperature. To be more precise, a portion of the warm waters from the gulf stream break away from Northern Europe towards Greenland and are then cooled by the glaciers. The cooled water becomes denser than the surrounding water, falls rapidly to the ocean floor and initiates a deep ocean current in a more southerly path carrying cooler temperatures and oxygen. At the other end of this conveyor belt, waters are forced up from the sea floor and nutrients are brought up along with cooler waters to then travel along the ocean’s surface currents.

At a very basic level, the benefits of these two-level conveyer belt current systems are that they bring oxygen down into the deeper waters, bring nutrients up to the surface from the ocean floor and help regulate ocean temperatures. The oxygen / nutrient elevation trade supports an unimaginable amount of life, but it’s the effects of the small ocean temperature shifts that we will probably feel first in our weather across North America and Europe.

What is the “Cold Blob?”
Where the warm gulf currents intersect the glaciers in Greenland and the actual AMOC occurs, it is common for there to be a cold spot on the surface temperature map of the Atlantic. The cool spot on the map is called the “cold blob” by the press because it sounds more monstrous, but a growing cold blob is definitely something we want to pay attention to.

Is a Growing Cold Blob Worrisome?
As the cold blob becomes larger on the map than expected, it is seen as an indicator of a slower AMOC and accelerated global warming. The concern is that if too much glacier melt occurs, the cooling areas for the Gulf Stream current in the Atlantic will be flooded with less dense freshwater and the newly formed brackish water will not sink to the floor of the ocean with the same volume or velocity. This is concerning because less volume and velocity of water means a weaker ocean floor current, and the overall conveyor belt cycle will start to slow down. This overall slowing down of the conveyor belt is also supported by the Western Antarctic ice shelf melting, which is what sparked this article. The real problem is that some of these systems cause reinforcing feedback loops that possibly risk the collapse of the AMOC in shorter timelines. If this all sounds familiar it may be because it was the focus of the 2004 dramatic climate thriller, “The Day After Tomorrow,” where man-made climate change rapidly accelerated arctic glacier melt, halted the currents of the oceans and within 48-hours threatened life on earth. The apocalypse is not where I am headed with this piece, but there are two interesting scenarios that may affect us in the next 6-months IF the measurements of a significant AMOC slowdown have been accurately determined.

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Scenario 1 - Lake Gatun and The Panama Canal
The predictions on how a slowing of the AMOC could affect lake Gatun are that it will combine with the El Nino effect and increase the intensity of the drought. Lake Gatun is the lake whose waters feeds the locks of the canal as well as the hydro-electric power plants used to operate the canal. The lake is currently running on a deficit of water and forcing the Panama Canal Authority (ACP) to issue restrictions on the number of ships and the draft of those ships crossing the canal. At the end of September there was an 89 ship “log-jam” waiting to cross, which was down from 160 in August. This additional traffic is based on 30% reduction in allowable ships a day through the canal. When the ships eventually do make the crossing there is also a new depth restriction that reduces some ships cargo by as much as 33%.  Both the depth and the cap restrictions are expected to stand until mid-July 2024 and there is even speculation that the cap will be lowered again in the coming months. The understanding of this problem grows even larger when the economics of the canal are understood.

The Panama Canal is one of the busiest 51-mile shipping lanes in the world. Six percent of the world’s trade passes through it each year, which includes 40% of all US container ships. Of the ships that pass through it, 73% are coming or going from a US port. The cargo traveling through the canal represents about $270 billion dollars a year in goods. Shipping from Shenzhen China is 15% faster through The Panama Canal versus The Suez Canal and currently the average wait time has increased to 2.5 days and is expected to rise. It is easy to understand why the canal is considered to be one of two critical global shipping choke points for a large percentage of the world’s goods.

Why is this a US Economic Concern?
An intensified drought over the next 6-months means that the shipping world and the US consumer market may have to learn how to temporarily live without the use of The Panama Canal. Besides devastating the economy of Panama, this could add another layer of price increases to US goods by forcing them to take more expensive and longer routes by water or even more expensive options by pushing more goods into air and rail cargo. This problem may even be upon us for the pre-Christmas season where it will likely start getting picked up by the press.

Why is this a Conflict Concern?
Some of the more treacherous waters of the world are found in the lower latitudes. The Panama Canal allows most shipments to avoid going around the lower tip of South America and The Suez Canal prevents most shipments from having to go around the southern tip of South Africa. The odds of The Suez Canal shutting down due to conflict are mostly low, but this is definitely not a good time to lose one canal while at the mouth of the other we are looking at the possibility of a prolonged war effort involving the leading global superpowers.

Scenario 2 - UK & European Heating this Winter
Last winter Europe escaped with possibly one of its warmest winters in recent history. This was an extreme stroke of luck as access to cheap Russian gas was no longer an easy option. The problem with this winter is that with a reduction in the AMOC the El Nino weather pattern is more likely to intensify the cooling for Northern Europe from January to March.  

Why is this a US Economic Concern?
This is a bit of a trick question. In the short term the US has “taken steps” to make sure that this energy crisis is something we can benefit from while maintaining the sanctions that weaken Russia. A cold winter could be very tough on Europe and the UK but may be very profitable for the US. Each degree cooler than the average temperature could cost as much as $2.5 billion dollars in additional cooling fees, meaning an exceptionally cold winter could wipe out all possible gains in possible GDP growth for that quarter. Again, this is profitable for the US in the short-term, but in the long-term it could be dangerous to do anything that drains US allies of resources when Europe and the UK combine to be the US’s largest trading partners buying 22% of our exports and providing 15% of our imports.

Why is this a Conflict Concern?
This is also a tricky answer. Globally there is a battle for power as the US protection of global waterways has receded. It has become an East versus West game; with Europe, the UK and the US clearly falling on the West side of the equation. As much as the US may enjoy taking natural gas dollars away from Putin, the US is unfortunately selling their gas for a 70% premium over Russia’s prices and this may be short sighted as it will eventually weaken the businesses of the US dollar’s largest allies. The bigger concerns should be for maintaining the power of the US dollar when it comes to China, Russia and Iran. Anything that hastens the decline of the UK and Europe may hasten the decline of the dollar and sour trade with the US.

What are the odds of economic events from changes in ocean currents in the next 12-months?
It has been reported that the AMOC has slowed down by as much as 15% in the last eight months. It has also been shown in a paper published in the last two weeks that the waters around the Antarctic are warming much faster than expected as well. However, while researching this article I found many of the papers I read had strong qualifying statements as to the shortcomings of the measuring techniques that were used for drawing these conclusions. That said, it does appear that the consensus is that we are in for changes in the weather beyond what we have grown up with and that the weather will be a greater variable going forward than it has been in the past. The degree to which that statement is true is one that is debated by far smarter people than me.

I will leave you with a quote on Mother Nature versus armies.

“Mother Nature is the only true superpower. She can bring down the mightiest empires and humble the proudest of men. Just ask the Germans at Stalingrad.” – Stephen E. Ambrose

Written By: Christopher LaBorde
The Keyboard Chimp

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Christopher LaBorde, his wife and their two children, live part time in the Middle East and part time in Louisiana. As a curious engineer and novice researcher that studies a multitude of topics, Christopher always welcomes feedback at Chris@silvertrading.net and www.TheSophisticatedChimp.com. All of Christopher’s writing is made possible by The Silver Trading Company www.SilverTrading.net, please allow us to help you with any of your precious metals needs domestically or abroad.

Every now and then a person comes along that just seems to make a difference in your life. Mr. Jenkins is one such man. I never had the privilege of meeting him but have studied his books and lectures for some time now. He was born in 1919 and spent his teenage years growing up during the great depression. Like many young men of his day he started work at an early age in order to help make ends meet at home. Mr. Jenkins died relatively young at age 60 in 1979. In between those years Mr. Jenkins led an interesting life. This is his story.

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Somewhere in the early 1960's Mr. Jenkins invented the automatic stamp dispensing machines that were installed in Post Office lobbies for after-hours operation. He also went on to invent other vending machines of one sort or another including those that changed federal reserve notes, “dollars,” for tokens, “coins.” During the course of his work for the Post Office the Treasury Department investigated his machines. They were quite impressed with the way they worked.

Mr. Jenkins told them that the only way a fake coin could beat his machine is if someone plated a slug with a silver surfacing. For the rest of his life he claimed that he was regrettably the guilty person who gave them the idea. When the Treasury started issuing token coinage in 1965 Mr. Jenkins started wondering exactly what this thing called money really was all about. He read and reasoned about the money issue and eventually wrote several works. "Money the Greatest Hoax on Earth" was his first book. It was published in 1971. It was followed by "Everything I Have Was Theirs", "Treadmill to Oblivion" and finally "Aeonic Monetary Delusion" published after his death.

Mr. Jenkins writes his books with a hard-hitting logic that is reasoned out in great detail. Sometimes the details seem over worked, but as he says in his books, exact definitions of terms are required for a proper understanding of larger concepts.

He had quite a correspondence with the IRS and the Federal Reserve that he shares in his book "Everything I Have is Theirs," which can be found here as a PDF. His most pressing letters result from a couple of questions: "Exactly what is a dollar?" and "What is the money of account in the United States?" The replies from these simple questions from all branches and levels of government as well as private banks and the Federal Reserve are truly astounding. Not one straight answer from all of them. Some even go so far as to chide him while almost telling him how beautiful The Emperor’s New Clothes are.

His most memorable lecture involved the question, "What is a dollar of money?" In the coinage act of 1792 it states that the money of account shall be expressed in dollars. The term "dollar" is a unit of measurement just like quart or inch. In and of itself a unit of measure represents nothing. In the coinage act of 1792 a dollar measure of gold was a certain number of grains of 999 gold while a dollar measure of silver was a certain number of grains of .999 silver. A silver dollar should have been expressed as "a dollar quantity of silver". The lecture goes on to suggest that since a dollar is a unit of measure of silver or gold and there is no more silver or gold in circulation, the term "dollar" in use today is meaningless. He states that a judge stated to him once that the term dollar is in common use and everyone knows what it is, to which he replied, "So is the term mermaid but they don't really exist either!"

Paper currency used to be "redeemable" in gold and as such was a note, payable in gold to the bearer upon demand. Now, since it is redeemable in nothing but another like piece of paper it is technically no longer a note. Yet we are still supposed to honor it in transactions as if it were the money (gold or other units of value) itself. He made his point by illustrating a hat check represented your hat that you checked at the door. It was not the hat itself, only a claim for the hat at a later time. Certainly, you would not wear the hatcheck home on your head as if it were the actual hat! He claims that we are now using the hat checks as hats themselves with our present system.

The argument that there are neither real "dollars,” or “lawful money of account" in circulation, lead to his next group of letters to the IRS. He stated that since there was no useable definition of a dollar in IRS tax codes and their correspondence with him, how could he send in a 1040 that required him to swear on the dollar amounts he had earned? He then stated that since federal reserve notes were not "dollars" and that he no longer could determine what a dollar was, he had been robbed of his labors over the past years and a crime had been committed. He followed this declaration with a request that the IRS help him in this criminal matter and to please return all his so called “tax dollars" that he had previously sent to them as evidence of the crime.

Since the dollar is a unit of measure and the modern dollar has nothing to measure, it can only follow that the modern dollar is now actually nothing. Money used to be redeemable in hard assets but the modern dollar has no assets and is technically monetized debt. This is where it gets a bit tricky, as our modern “dollar” is both simultaneously an asset and a debt.

Mr. Jenkins' books are filled with references to court cases and his correspondence with various officials. They read like a Greek tragedy. I have only attempted to illustrate a small part of his total works. However during the course of his studies he developed a list of 52 economic truths that can be looked up here, that are brilliant guide posts for understanding money. Economic Truth #33 - Inflation must end with deflation, seems most applicable for our current times, though. Especially when it comes to the US mints stamping of their precious metals tender in their Gold, Silver, Platinum and Palladium American Eagles series, which all have a stamped US dollar values on them. This series of US coinage all came about after Mr. Jenkins had passed.

I am sure he would have had fun with the new American Eagles had he been alive to see them issued. All the following issues are legal tender: Silver Eagles at $1.00/oz, Gold Eagles at 50.00/oz, federal reserve notes, old silver coins before 1965 coins with 10% silver, and gold certificates from years past! Each of these items has a market value that is different from their stamped legal tender value. I am waiting for someone at the treasury to explain that this. Perhaps we should write them a letter.

I leave you with a quote from section 19 of the coinage act of 1792 after the US founding fathers just had their little experiment with fiat currency in the form of the continental dollar, which came to a nasty end.

"If any of the gold or silver coins shall be debased ...every such officer or person who shall commit any or either of said offenses, shall be deemed guilty of felony, and shall suffer death.”

If we were to enforce this, the gallows would have a back log!

Written By: Larry LaBorde

This article was originally crafted by my father for his readers in 2005, and its content was at the root of many of our debates. The simple answer was to always answer him with “everyone knows what a dollar is,” but he was quick to remind my younger self that this definition was manipulated as part of a robbery. It is only in today’s times that this conversation is becoming more mainstream and the US is coming to understand what inflation fully means.

Edited By: Christopher LaBorde
The Keyboard Chimp

Christopher LaBorde, his wife and their two children, live part time in the Middle East and part time in Louisiana. As a curious engineer and novice researcher that studies a multitude of topics, Christopher always welcomes feedback at Chris@silvertrading.net and www.TheSophisticatedChimp.com. All of Christopher’s writing is made possible by The Silver Trading Company www.SilverTrading.net, please allow us to help you with any of your precious metals needs domestically or abroad.

After secession of the Southern States, Lincoln wanted to raise an army and invade the Southern states that had left the Union. To his dismay, he had a large overriding problem - MONEY! Raising an army and equipment for the purpose of war requires upfront cash and a large financial burden to be placed on a government and its people. Many of those people were not in favor of the war or the debt it would bring.

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Contrary to the history books, there were quite a few US citizens outside of the South who were against Mr. Lincoln's war. Many newspaper editors, US congressman, the entire Maryland legislature and the mayor of New York were just some of the Northern citizens jailed for speaking out against the war. The New York Draft Riots were also evidence of a lack of compliance amongst the people when it came to fighting in a war that they did not support. I bring these issues up to demonstrate that the war was not a popular thought, and neither were the financial measures that were needed to make it happen, such as the new unbacked paper dollars.

During the War Between the States the Secretary of the Treasury was Mr. Salmon Portland Chase. He came up with the idea that the government could issue non-gold-backed paper money directly as payment for debts and then issued an order stating that this paper money could not be redeemed for the normal gold backed money of the time until a much later date. These new paper dollars were essentially small "no interest" bonds issued by the government with nothing more than a promise to redeem them at some unspecified time after the war. These were the first unbacked paper dollars issued by the federal government. On February 25", 1862 the Union government printed $150,000,000 of these new "greenbacks". They were used to pay and make purchases for the army.

The Union government agreed to continue to pay its interest payments on their regular bonds in gold and naturally demanded that all taxes continue to be paid in gold. However, the Union government insisted that the greenbacks were just as good as the gold redeemable currency and should circulate side by side with the regular gold redeemable currency, thus confirming the existence of a two level currency to be used in the same marketplace.

Several congressmen of the day spoke out against these greenbacks, but the greenbacks were reluctantly voted into existence. Many of the yes votes were qualified on the floor of the house and senate with statements to the effect that "however bad greenbacks may be, we see no other alternative and we therefore reluctantly vote for them." Forcing the public to loan money to the government as they printed unbacked money was clearly unconstitutional, and the representatives and senators knew it at the time! Newspaper editors and concerned citizens pointed this out and some were imprisoned for their opinions.

Lincoln’s greenbacks paid for the war, but they were not considered equal to the currency of the day. As you might imagine, two prices for everything developed. One price for greenbacks and another in gold. The legal tender law prevented two-tier pricing, however, those who abided by the law quickly became bankrupt. The exchange rate between the two currencies changed almost daily as the fortunes of war changed with each battle. When the Union was doing well the greenbacks exchanged well. When the Union was doing poorly, it was best to buy your groceries with the gold backed currency.

On July 11, 1862 and March 3, 1863 the second and third infusions of $150,000,000 were authorized and printed. At the low point for the greenback, it's value was only 1/3 of its gold backed counterpart. Over the course of the war the Union printed a total of $450 million dollars in greenbacks, or over $70 billion in today’s purchasing power.

Meanwhile down in Dixie President Davis was having his own problems raising his army to defend the newly formed government of the southern states. Nearly one billion notes were issued by the southern government during its brief existence, and during their five-year span from 1860 to 1865, prices in the North rose by 46%, but prices in the South rose by 10,000%. The inflation in the south started slowly at about 12% per year but quickly picked up steam. Unfortunately, the newly formed southern government had less than $50 million in assets to back the confidence of its currency and had pledged not to implement any type of national tax system. Its very essence was designed around a weak central government with strong state governments, but this led to a real problem in raising funds to continue the national defense of the southern states. Lincoln new that with enough time the southern states did not have the economic fortitude or structure to remain at war, as their currency was weak. As a result, one of his primary strategies was to make sure the union would simply outlast the newly formed southern government.

Despite this money problem, men in the south volunteered to defend their homes and continued to show up to fight for a war taking place in their backyards. If given enough time the currency problems may have been overcome in the same way that the Continental dollar crisis was resolved in the American Revolutionary War, but it would have been a big hurdle. However, on the very short timeline of the US Civil war, it was a death nail to the efforts of the southern states for their independence from a centralized government. John Kenneth Galbraith wrote, "The miracle of the Confederacy, like the miracle of Rome, was not that it fell but that it survived so long."

The second part of Lincoln's war strategy was to break the "economic back" of the South by crippling its ability to continue as a prosperous financial powerhouse. He achieved this by destroying railroads and restricting its trade with Europe. He then ordered Sherman's "march to the sea" where towns, farms, private property and the entire City of Atlanta were burned to the ground. Orders were also given that women and children could be treated as combatants or left to starve without homes or food before the winter. General Sheridan was also given similar orders to loot the entire Shenandoah Valley and engage noncombatants. The idea was that if the women and children were drawn into the war, the southern soldiers would eventually get word on the front lines and abandon their posts for their families. All this was done in spite of the newly formed Geneva Convention of 1864. This economic and physical devastation of property along with the harm to non-combatants left bitter feelings long after the war was over and left the country itself in a half crippled state for years to come.

When the South finally collapsed, the loss of one billion dollars to its economy from the failure of its currency, along with the utter destruction of the farms and industry, left it handicapped for generations. The richest area of the country before the war was locked in as one of the poorest areas after the war in a world that had moved on without it.

The Union's greenbacks were finally redeemed fifteen years later in full. Many people in the north lost money and many speculators in greenbacks became rich men. The Supreme court then declared the greenback unconstitutional money and it was retired, until 1965 when a new version of it became our current unbacked dollar.

Who was the man who led the Supreme Court to strike down the very financing tool of the North's victory? It was the same man who ushered in its birth. For you see by 1870 the chief justice of the Supreme Court was none other than former Secretary of the Treasury, Salmon P. Chase, who was then given the tidy opportunity to put to bed the monstrosity that he had created many years prior.

Always remember, that the victors write the history books.

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This article was originally crafted by my father for his readers in February of 2004, but its content is possibly more relevant now than ever before with multiple proxy wars threatening to bring down the US financial system.

Written By: Larry LaBorde

Edited By: Christopher LaBorde
The Keyboard Chimp

Christopher LaBorde, his wife and their two children, live part time in the Middle East and part time in Louisiana. As a curious engineer and novice researcher that studies a multitude of topics, Christopher always welcomes feedback at Chris@silvertrading.net and www.TheSophisticatedChimp.com. All of Christopher’s writing is made possible by The Silver Trading Company www.SilverTrading.net, please allow us to help you with any of your precious metals needs domestically or abroad.

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The history is everything in understanding this conflict. When it comes to recent history, it was just two years ago that the press and social media picked up on the “unfair” stories of the Sheikh Jarrah Jerusalem evictions at gunpoint. Israeli courts decided to evict Palestinian settlers from 80-year-old family homes in areas that US / Israeli developers wanted to develop. During this news cycle there was also the story of the Al Aqsa Mosque being stormed during Ramadan prayers by Israelis with stun grenades and tear gas. This action sent worshipers to the hospital, caught the 3^rd holiest mosque in Islam on fire and was the backdrop of chanting extremists yelling, “Burn their memories again.” At the time, various national monuments were lit up with the colors of the Palestinian flags and social media warriors around the globe were talking about how much Israel had been a terroristic bully towards Palestine over the last 72 years. Fast forward to today and the social media pendulum has swung to the other end, and apparently the prior history with it as well.

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“I stand with Israel” seems to be the narrative across my US social media and “Palestine is a terrorist nation full of non-humans,” seems to be the underlying message. Before I write much more, I want to be clear on a couple of topics. Killing is horrible. Mass loss of life is not a statistic, it is a tragedy. There is no healthy family on the planet that wishes for the death of their family members. No mothers that want to attend the funerals of their children. And both sides are trudging into the worst sides of humanity. What this article is about is how disgusting the press and social media manipulation is becoming and how larger narratives are being outright ignored.

My Arabic speaking friends have made it a point to share the differences in what they are reading and seeing in their more local feeds versus what they are seeing in the Western news. One of the examples is of the bloody Israeli woman loaded into the jeep from the morning of the Palestinian attack. In the Western press this story is pushed as a hostage assumed to be headed for death. However, in the Arab press the coverage shows that even though she was an Israeli hostage she was brought to an Arab hospital because she had been unintentionally injured, treated and was released under her own power to return to her family. In another more specific Arabic case, footage that is muted in the western press is not muted in the Arab press and can clearly be heard to say, “We have no intention of harming you, you will be safe and you will be returned. Do you have any guns in the house?” Whereas in the Western press they show the clip of the soldier entering the house of terrified inhabitants on repeat. Beyond these types of examples, many of the news images and videos popping up on YouTube are starting to appear to be specifically designed for propaganda.

Within 24 hours of the launch of Palestine’s attack, friends reported that they had just seen a paid YouTube advertisement to justify Israel’s position for going to war. Four days later it came out that the pictures of burned babies are likely AI generated and that Israeli soldiers have come forward to say that they are not coming across any intentional cases of harm to children like what is being reported. The killing babies thing is extremely suspect as accusations of killing babies is a known fast track to dehumanizing “bad guys.” I am not defending the actions of the those that are harming others, but it has become obvious that the West is being sold a far more dehumanizing narrative towards an outright war against the Palestinians. The question is, why? Before we head towards the questions though, there are a couple of basic truths about the history of Palestine as a land that may help make sense of this.

1917-1920
Palestine was founded on the false promises of a global superpower and a banker which doomed it from the start. During WWI in 1917 the United Kingdom promised the Palestinian lands to the Arabs for help in defeating the Turks. The idea was that victory would liberate Ottoman territories and for the help of the Arabs they were to be granted some of these new territories. However, the new territories were also being eyed by a Rothschild Zionist banker for a new permanent home for his people. The result was that from the start the land was double promised to two groups of people. To make matters worse, two diplomats from the UK and France (Sykes & Picot) had already arbitrarily divided up the land with no consideration for the people or cultures currently inhabiting it. Admittedly this part of the world had been troubled with different power grabs, but these new conditions imposed by the global powers of the time guaranteed that the following century would be extremely bloody.

Trends:

• From the beginning outside powers have been part of the conflict

• From the beginning many outside powers have not taken the time to understand the region

1920-1948
In the beginning, in 1920, both sides did not like that they were forcibly under the heavy hand of British rule. The hatred that developed was nearly equal to the dislike that they had for each other, but at the time the British were executing hundreds of members of each side for accusations of inciting trouble. This heavy hand eventually incited uprisings, and after nearly 3 decades of bloodshed the British determined that they had had enough. During this same period, 1920-1948, a rise in antisemitic sentiments in Europe caused the Jewish population of Palestine to explode from 57,000 to 608,000. This also meant that many of the Jews in Palestine had recently been exposed to fearing for their life in Europe only to find themselves in a second hostile environment. With mortal fears running high combined with the local hostilities, the Jews were not going to be pushed out of Palestine. On May 13^th 1948 they forcibly cemented the nation of Israel by killing 15,000 Arabs and evicting 750,000 Arabs from the new state of Israel. From that point forward the two-state solution was in play and the neighbors had quite the history.

Trends:

• Both groups have been taking directions from outside forces from the very beginning

• Both groups also have their own agenda and

• The internal stakes from the beginning have been inherently high and primed for conflict (especially with outside encouragement)

1948-Present
Over the following 65 years the Israelis maintained the upper hand for most of the battles with the exception of the Yom Kippur War, where the US bailed them out and paid for it with the US Oil Crisis of 1973 (followed by the US / KSA alliance that built the Petro Dollar that we wrote about). Over these 65 years a recorded tragic 63,543 deaths from both sides took place in the Palestine Israel conflict, unfortunately, this number is likely multiples larger than the reported number. Over the last 16 years alone, the conflict has taken a recorded 6,715 lives in just the “Occupied Palestine” area according to the United Nations, with 1 of every 22.5 deaths being an Israeli death.

Trends:

• Since 1920, world powers, with the exception of Egypt, have been mostly content to let the Palestinians and the Israelis kill just each other, and for the West and the USSR to offer supplies but rarely people.

• Everything about the fatality ratio suggests that the Israeli’s have superior technology, funding and resources.

Note:

• Both he 1967 and 1973 Arab Israeli wars were found to be encouraged, if not incited, by the USSR for strategic gains against the US.  

1967 to 2005 - Occupied Palestine
From 1967 to 2005, Israel occupied some part of Palestine and maintained a level of control over it. It can be argued that the occupation has never stopped as Israel still maintains control of water, electricity and critical supplies up to this day for some parts of Palestine. This control has the potential to build a level of resentment that very few people understand, based on a looming and continuous pressure of the option to exercise force over others. Scientists have even studied and clearly documented the effects of this type of pressure and how humans can behave when given power over other humans. I bring this up as it is a component to the conflict that doesn’t get much coverage in the West but clearly influences decisions on both sides.

Trends:

• Since the occupation, Palestinians often behave the way that we expect humans to behave under continuous stress.

• Palestinian aggressions since occupation, typically involve short term planning for retaliations as the Palestinians are continuously monitored.

Questions that we all should be asking:

• Which world power(s) could benefit from a significant conflict in the Middle East?

• Why would someone in the Israeli government allow a border breech?

I can’t answer either of these questions, but it should be known that multiple border breeches at the same time should be considered extraordinary, since cats playing have been known to set off border alerts in Israel.

It should also be known that we seem to be entering into “war season” and the more money that can be drained from the US war chest, the less of a threat the US can pose in these conflicts. The three conflicts that spring to mind the quickest are:

• Power over Eastern Europe – Russia vs. Ukraine/UN/US

• Power over the Arabian Gulf – Iran vs. Saudi/US

• Power over the East China Sea – China vs. Taiwan/US

If this all sounds far-fetched, know that in 1967 in Palestine, during the cold war, the USSR cleverly baited Egypt into starting a war with Israel to drag the US into it and drain resources. Six years later the USSR again encouraged the 1973 war in Palestine that then caused the US Oil Crisis in 1973 and almost sank the US economy.

Over the next two weeks it is very likely that if you listen carefully, you will find a number of claims that have been made since the Palestinian attack on Israel that will be determined to be fake news. Unfortunately, they will have likely been considered the truth for long enough for the US congress to link funding for Ukraine, Israel and Taiwan all at the same time. And just like that, we will be committed to multiple foreign crises in faraway lands.

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Written By: Christopher LaBorde
The Keyboard Chimp

Christopher LaBorde, his wife and their two children, live part time in the Middle East and part time in Louisiana. As a curious engineer and novice researcher that studies a multitude of topics, Christopher always welcomes feedback at Chris@silvertrading.net and www.TheSophisticatedChimp.com. All of Christopher’s writing is made possible by The Silver Trading Company www.SilverTrading.net, please allow us to help you with any of your precious metals needs domestically or abroad.

It's hard for some to even imagine deflation in our current economic situation. All the fed has to do is just juice up the economy by lowering rates and presto - instant inflation.

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Assuming of course that people are in a borrowing kind of mood. Remember that "velocity" is the other factor that must be considered when talking about deflation. Even if the Fed is giving it away for practically nothing, someone has to take it! When fear overcomes greed and the takers start to back off, even no-interest money cannot spark a borrower's interest in piling on more debt. This installment covers a part of American history when deflation was a relevant fear. There were even instances of railroad bonds being issued for 100 years at 1% interest during this time.

DEFLATION IN AMERICA:
Conditions rocked along after the war between the states and the country got back to the business of business. In the late 1800's a slight gold shortage was developing. The economy and population in America were growing faster than the gold supply. Through the law of supply and demand a very small amount of price deflation started to occur. Farmers hated deflation because they would borrow money to plant crops in the spring, but while they were growing the crops all summer the dollars would become stronger and the farmers would have to sell their crops in the fall for lower prices. Bank loans did not take into account that the dollars were growing stronger, which made loans more expensive for the farmers and more profitable for the bankers. A condition the bankers enjoyed and encouraged.

A great cry went up across the country for a bi-metallic system to include silver as well as gold to back the dollar. This system would create a fixed value ratio between the metals and allow both gold and silver to back the currency. The logic behind this was that there was no shortage of silver and that the addition of silver as an allowable dollar backing metal would allow more money to be created into circulation. These additional dollars could grow the money supply at the same growth rate as the population instead of being hampered by the gold shortage. On top of this, the farmers were hoping that the government would be tempted to print extra dollars and create some mild inflation, which would make it easier for them to repay their loans with cheaper money at harvest time.

The bimetallic plan called for silver to be valued at a ratio of 16:1 with gold. Since a great quantity of silver was being produced out west by the silver states, there was a big political push with the farm states and the mining states for the proposed new system. This became one of the two focuses of the presidential election of 1896, using silver to beat deflation and halting American imperialism.

During the election McKinley sat on his front porch in Ohio and lectured delegations from around the country while William Jennings Bryan stormed across Middle America. Bryan claimed that mankind was being crucified on a "cross of gold". Bryan said the existing gold standard was being forced upon the common man by the big Eastern bankers. Bryan campaigned vigorously for a bi-metallic monetary system (easy money) and against imperialism. Bryan was right on these points, but being right does not mean you can beat the bankers.

McKinley won the election and the gold standard held firm. The bankers were happy, but the US had just signed itself up for the philosophy of imperialism and all that comes with it. Shortly after the election these philosophies were brought forth in the Spanish-American war, which began in 1898 with the sinking of the Maine in Cuba and ended with the liberation of Cuba and the territorial possession of the Philippines by the United States. Two situations that still bring troubles to the U.S. to this day.

The story of this election was immortalized in 1900 in Frank L. Baun’s political satire, The Wizard of Oz. The book focuses on the “evil actions” of the big Eastern bankers in New York represented by the wizard of ounces “Oz,” the Eastern establishment represented by the Wicked Witch of the West and the oppressed commoners throughout the rest of the country. The Kansas Tornado was the troubles that had been forced on the American people. Dorthy Gale represented the US people that had been troubled and “just wanted to go home” and get back to normal. The farmers, were represented by the scarecrow who were struggling to make a living. The industrial workers that were losing their jobs were represented by the tin man, a man that was looking for a heart to lead him. The cowardly lion was represented by William Jennings Bryan and his indecisive ways. The munchkins were the duped population in the East that could not see things as they really were because they were forced to wear green colored glasses. And the yellow winkies, who didn't get much coverage in the movie, were the poor Filipinos who were the oppressed people as a result of the Eastern banker's imperialistic ambitions.

In the end Dorothy finally clicked her SILVER slippers together and everyone saw the light and lived happily ever after on the bimetallic system. However, someone in Hollywood thought ruby-colored slippers would show up better in tech-no-color so the world was never to see the silver slippers.

The flying monkeys are one of the most complex and debated characters in the story. Many consider them to be the oppressive and chaotic force that the establishment holds over the un-empowered. Some consider them to be the general forces of evil on a society. As a boy, I found them to be a truly terrifying nameless force, but as an adult I now think of them as the powers behind the FED.

At any rate gold was discovered in Alaska as well as South Africa shortly after 1900 and the "shortage" of gold was relieved. The gold standard remained intact until Nixon broke it in 1971, but World War I and the Bretton Woods agreement had already significantly weakened the gold backed dollar. More on that subject in another installment.

History through a monetary lens is often far more accurate than any other lens one can use. The farmers, the industrial workers and yellow winkies, all lost to the big Eastern Bankers and “the Flying Monkeys.”

In our prior article we saw that bankers can occasionally lose big, but remember that it takes extraordinary circumstances.

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Written By: Larry LaBorde

Edited By: Christopher LaBorde
The Keyboard Chimp

Christopher LaBorde, his wife and their two children, live part time in the Middle East and part time in Louisiana. As a curious engineer and novice researcher that studies a multitude of topics, Christopher always welcomes feedback at Chris@silvertrading.net and www.TheSophisticatedChimp.com. All of Christopher’s writing is made possible by The Silver Trading Company www.SilverTrading.net, please allow us to help you with any of your precious metals needs domestically or abroad.

My fascination with money began at an early age. I happened to be 7 years old when the new 1965 "tokens" were first minted. I was not sure why, but I knew there was something going on here. Several adults grumbled and complained that the new coins were really tokens because the last real coins had been minted the year before, in 1964. Several people I knew began collecting the 1964 and older coins and kept telling me that I should too because some day they would be worth something. And so, at the tender age of 7, I became a "coin collector" and a "silver commodities trader". At the time my, Father was on the board of directors at one of the local banks so I asked all the tellers at the main branch to "save the silver for me" and I would trade tokens for them. I did the same with the lady in the cafeteria at school. So once a day at school and twice a week at the bank I would collect a few silver coins. I didn't know it at the time, but a powerful law of economics was at work. Gresham's law states that "bad money will drive good money out of circulation" which simply means that people will hoard good money and spend the bad. This is exactly what happened in the mid 1960's as I am sure most of you here remember. It didn't take long before my take was getting smaller and smaller every week and finally dried up. I packed my hoard of silver coins away and eventually forgot about it.

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I graduated from college in 1979 as an engineer and became a full-time taxpayer. Reagan was running for office and was saying that he could "fix inflation." I had just lived through the wild inflation years during the mid to late 1970's but I was in high school and like most people I believed that Volker at the Federal Reserve was trying to "fight inflation." President Carter was blaming the inflation on "the Arab oil embargo". Nixon had blamed it on "the wage and price spiral" and even tried wage and price controls that were a total joke. I was immediately caught up in the condition know as "income tax bracket creep." I got a little upset about that and I began to wonder about a few things: why does everything have to cost more every year, what is money, why did they change the money in 1964, 1968 and 1972, what exactly was the Federal Reserve and what exactly did Paul Volker do there? I began researching these questions slowly and asking people who should have known the answers. I got nowhere fast. Slowly through reading dozens of books on the subject from many different points of view a light started to glow. I will attempt to share what I have learned over the past many years. History always makes more sense when studied along with the financial conditions of the times. It is a long tale of greed and ruin. But first like all good stories; let's back up and start at the beginning. Well, maybe not all the way back to the beginning, as I tend to skip up and down the timeline.

A Brief History of the Knights of the Temple of King Solomon
In 476 AD Rome finally collapsed and the last of the market economy went with it. The "small market correction" that followed was called the Middle Ages. It was a long correction cycle but Rome was quite a blow off top. The feudal system was the financial order of the day where society was built around large manors or estates. In this type of society there was little need of money. Not much was traded between manors, illiteracy flourished and money fell out of general use in western Europe. In Eastern Europe the Byzantine emperors continued to mint a standard gold coin, but elsewhere, any coins that were minted were suspect.

With the crusades to retake Jerusalem during the Middle Ages money again became important as travel and interaction with others became necessary. In 1,118 the order of Knights of the Temple of Solomon or the Knights Templar or simply, Templars was formed by Papal order for the express purpose of retaking the Holy Lands and protecting the routes to and from Europe. The Templars were a new kind of religious order that had never existed in the Church before. They were warrior-monks who took vows of chastity and poverty. They became some of the most feared warrior knights of their time. Much has been written and speculated concerning the Templars causing many legends and stories that include: the search for the ark of the covenant beneath the site of the Temple of Solomon, the secrets of Roslyn Chapel in Scotland and the lost treasury of the order. Whole volumes of history on their order alone have been written and make for fascinating reading. As the order grew new recruits came from the noble classes, mostly from 2nd sons who were not to inherit. The order grew and acquired many monasteries throughout Europe that served as recruitment stations for more warier monks. Through gifts and captured “infidel treasure,” they grew quite wealthy. At their zenith, the order owned over 800 castles in Europe and collected money for the crusades and also started to finance them. All of their land holdings funneled money to their headquarters in Palestine.

Since the Templars had all of these castles throughout Europe they became logical places for noblemen to deposit their wealth when they left on crusade to the Holy Land. After all, when a nobleman left his castle to fight in the Middle East he would take his ablest men and would have to leave his treasury at home only lightly guarded. The Templars' monasteries became natural places to leave money, as they were populated by warrior monks who had sworn a vow of poverty. To make matters even more interesting, the Templars would give the noblemen a letter or draft (with a secret code only recognized by other Templars) that they could present to any Templar castle along the way and withdraw gold coins that were used in that particular area. This was quite attractive to a nobleman traveling with a large group to support but wary of carrying his entire treasury on the road into uncertain and sometimes hostile territory. Thus, the Templars due to their unique position at the time became the de-facto bankers of Europe. "Templar drafts, don't leave the castle without them." Carl Maulden would have been proud.

The Templars even had their own Navy to transport goods, money, and men to the Holy Land. But even though the finance end of the order was growing by leaps and bounds, the military side of the order was losing ground in the Holy Land and finally was forced to retreat to the Island of Cypress. Right up to the end of the order's official existence, the Templars were making plans to retake the Middle East mainland.

In the late 1200's King Philip IV of France or Philip the Fair was in dire need of money. He had been at war for years and wars are expensive to wage. Like the Romans before him, he experimented with many income collection methods: such as reducing the amount of silver in the coins, raising high taxes, confiscating the property of minorities (Jews) and then expelling the minorities (Jews) and even taxing The Church. All attempts to increase revenue failed miserably, but Philip had a more advanced move in mind, attack his bankers.

The main Templar treasure house for the entire order at this time was in Paris and Philip had borrowed heavily from the Templars. In a well thought out move, Philip moved the papacy to France and was instrumental in seating Pope Clement V in France. Once gaining control of the head of the church in 1307, Philip conspired with Clement and ordered that the Templars be rounded up. They were to be arrested on trumped up charges of heresy in the modern-day equivalent of a coordinated character smear campaign, with a more deadly twist. The day of this round-up was Friday the 13^th, a day that became universally known for bad luck. The Templers were tipped off and only the head of the order, J. DeMolay, and some of the elders allowed themselves to be rounded up.  A move that turned out to be a grave misstep in judgment.

With the intelligence that King Philip may not have pure intentions, the entire Templar treasury along with the Templar navy set sail on the night of the 12th. DeMolay, however, was the king’s banker and assumed he was untouchable. So, a couple days ahead of the 13^th DeMolay and some Templar elders arrived with a wagon train of silver to discuss the re-invasion of the holy lands with Philip and to replenish his treasury. As head of a monastic order that had been instrumental in fighting in the crusades, DeMolay also did not fear a meeting with the pope. Much to DeMolay's regret, Pope Clement was in Philip’s pocket and king Philip was not in the mood to respect any of DeMolay’s positions. All Templars present in Paris were captured.

For several months the captured Templars were tortured and questioned in Philip's prison. Pope Clement had declared the order heretics of the church and had issued a papal bull disbanding the order and their lands forfeit. Finally, Philip had all the captured Templars executed and DeMolay himself was slowly roasted to death over hot coals placed at a precise distance designed to prolong his death and serve as an example to others that no one was outside of the king’s reach. Thus ended the first banking empire in Europe during the Middle Ages. A dramatic chapter ending that may be worth taking note of as a banker, extreme debt may lead to extreme actions.

Much has been written about where the Templar treasure is today. Some claim that the surviving Templars went to Scotland and fought with Robert the Bruce for Scottish independence. Some claim other tales of travel to North American prior to Columbus. The surviving Templars, no doubt, were not happy with Philip or the Pope for their treachery concerning the order, so their navy declared guerrilla war upon the French King's ships. The naval battle flag of the Templars is quite familiar to all even today. Who after all has not seen the "skull and crossed thigh bones" on a black background?

Always remember, "History is written by the victors.”

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Written By: Larry LaBorde

Edited By: Christopher LaBorde
The Keyboard Chimp

Christopher LaBorde, his wife and their two children, live part time in the Middle East and part time in Louisiana. As a curious engineer and novice researcher that studies a multitude of topics, Christopher always welcomes feedback at Chris@silvertrading.net and www.TheSophisticatedChimp.com. All of Christopher’s writing is made possible by The Silver Trading Company www.SilverTrading.net, please allow us to help you with any of your precious metals needs domestically or abroad.

There are things so large in this universe that the average mind does not have the capacity to understand. Stars in the universe 50,000,000,000,000,000,000,000 , gallons of water in the oceans 3,500,000,000,000,000,000 and now the official US debt 33,000,000,000,000. In one of my prior articles I mentioned that even an exceptional mind that has not been trained in exponential growth has almost no chance of possessing a feel for it. In the same vein, a person that has spent a lifetime in numbers with a maximum of 6 to 7 zeros in it will have real difficulties comprehending numbers with 12 zeros in them. For my own learning I decided that I needed to try to ground myself in these massive numbers, and then had some fun wrapping them into a colorful little summary. 

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Comparing big numbers to help me wrap my head around the size of this debt…

Dollar Bills on a football field:
How tall would 33 trillion in $1 dollars bills stacked in the shape of a US football field be?
A: Roughly a 231,000 ft tall solid building structure 
OR 85 times taller than the tallest building in the world where 90% of the floors would be too high for human oxygen needs

Leaves on Trees
How many leaves are on all of the trees in Louisiana?
A*: 130 trillion leaves on Louisiana trees 

Ants and Flies in the United States
How many red fire ants and flies are there in the U.S.?
A: 29 trillion (5 trillion Flies and 24 trillion ants)

U.S. Manure production for a Year:
How many pounds of agricultural manure was produced in the US last year?
A: 2.8 trillion pounds of manure 
(Enough for each man woman and child to have 75,000 pounds each)

5 Gallon Buckets of water from Lake Erie:
Our smallest of Great Lakes by volume, Lake Erie, has how many buckets of water in it?
A: 25.4 trillion buckets of water

Summary
The enormity of this debt is staggering; if we built a skyscraper with it, most of the floors would lack oxygen. All the leaves of all the trees in Louisiana probably couldn't fake enough dollar bills to cover it, and if we collected the poop of every animal in the U.S. we could only offer a tablespoon to dollar trade. Selling every ant and fly in the country at a 1-dollar-per-critter rate might get us there, but the stench of irresponsibility that got us here would require draining the entirety of Lake Erie to even begin to start to clean the situation.

Conclusion
The only way out of a debt this size is a default, as there is no way that 167,000 tax payers can pay off $197,000 in additional taxes on an average income of $33,200 a year in a reasonable period of time. The fast version would be with a “debt Jubilee” event. The slow version would be with printing so many dollars that even though the debt is massive, the debt itself would become worth nothing because the dollar would become worth so little. Next time you think about the magnitude of this US debt number, I hope some of these numbers help give you a feel for the sheer size of this problem.

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Christopher LaBorde
The Keyboard Chimp

Christopher LaBorde, his wife and their two children, live part time in the Middle East and part time in Louisiana. As a curious engineer and novice researcher that studies a multitude of topics, Christopher always welcomes feedback at Chris@silvertrading.net. All of Christopher’s writing is made possible by The Silver Trading Company www.SilverTrading.net, please allow us to help you with any of your precious metals needs domestically or abroad.

You may have read some of his work, as he enjoyed writing to clarify his thoughts and he often wrote on monetary topics. It was always my suspicion that he brokered precious metals as an excuse to talk with his readers, and some of you may have known him through his “scribblings” of the last 20-years. I would like to thank the countless number of you who have very kindly called to tell me about the hour-long conversations that you stumbled into with him. What most people outside of his family would not know, is that he led an extraordinary life under what appeared to be the most ordinary of circumstances.

Larry was raised in Louisiana by parents who had survived the great depression and WWII, and were nearly permanently stuck in a “make hay while the sun is shining mode.” His father “played offense” by starting a business and striving to make it as profitable as possible, while his mother “played defense” by keeping the books and serving as the ultimate judgement for all expenses. My grandfather did not often discuss early hard times and his time in the war, but my grandmother took time to explain to her children and grandchildren that economies can break and that the consequences were not small. Both of his parents wore the scars of having their worlds turned upside down before turning twenty, which fostered an intense combination of a “just-do-it” and “always finish what you start” mentality that found fertile ground in my father.

A Pivotal Summer
Despite being inclined to dot “i’s” and cross “t’s”, my 16-year-old father used his summer job money for lessons to attain a private pilot’s license. Besides being a bit ambitious, it was also a bit hazardous as he did it without fully explaining the situation to his mother. His best friend’s father recognized that he had an intense fascination with airplanes and allowed him to use his plane to organize lessons and start making steps towards a career in aviation. In a matter of months he had solo’ed and in a single summer he had cemented his passion for aviation. In that same summer he was helping his best friend work on a boat when he met “the lovely miss Puddy,” (pudding – with a “y”) my mother, whom he often wrote about in his articles. Within a month of meeting her, he told her that he planned on marrying her. Naturally, her first thought was that he may not know what he was saying, but she also knew that he had an unshakable confidence and that as scary as it was, he probably meant what he said. A couple months later they attended her prom, where an ungentlemanly X of her’s casually told my father, “She is just with you until she comes back to me,” to which he responded by swiftly breaking the X’s nose. Those around them assumed that the uncharacteristic move was part of young love, but with the assuredness that my father seemed to live the rest of his life with my mother, he knew that there was much more at stake there and made that relationship a priority.

In 1976 my father had some choices to make. His transcripts and test scores brought offers from MIT and the Naval Academy, where he may have had a shot at flying jets. The problem was that my mother still had another year of high-school and he refused to put that much distance between them. Despite his mother’s disappointment, Louisiana Tech became the lucky benefactor of a decision to remain close to my mother. The next summer they were wed and over the following 45-years there were plenty of bumps, but my sister and I were given the privilege of witnessing two people that genuinely loved each other.
Lesson – If there is someone in your life that you know in your gut that you want to keep in your life, take the big risks and make the big sacrifices.

They were both quick to say that they were very lucky to have met at such a young age, but it was also easy to see that they worked at it every day. It wasn’t until after his passing, however, that I fully understood how hard they worked on it. My mother shared that they would take on activities like writing each other love notes for 365 days straight or sitting face-to-face with nothing between them and having the tough conversations that neither of them wanted to have. They also built couples habits that were non-negotiable, such as a big hug the first time they saw each other after work and not shying away from holding hands or similar such behaviors. They both fell short in their relationship on multiple occasions, but they both had an unwavering commitment to working towards the other person and their relationship.
Lesson – Hard work pays in relationships, sometimes the time for that work is when things are good and building maintenance habits is easier than recovery exercises.

You Are Never Too Old for Big Uncomfortable Change
After graduating college my parents moved back to Shreveport and my father started working in the family business. Children, life, a tough business climate and 25-years of professional responsibilities, started to ware my father down. My mother could see that he wasn’t smiling as much, and that the victories didn’t seem to have the same lifting affects that they once did. So, when an opportunity came that showed promise for positive change she started pushing. My father would have done almost anything for my mother, but her request that he attend a workshop designed to provide “perspective into your life,” put that commitment to the test. He begrudgingly attended a three-month multi-weekend program that promised to challenge many of the forged assumptions that had governed a lifetime of thinking. The grumbling he was producing in the house was downright unpleasant for the first month, but by the end of the third month my father had come to the realization that things could, and should, be different going forward. Life had not been bad, but it was time that he made some changes for himself and those around him that he loved. The first big change was to fire himself from his operations role and start growing his younger brother into the job while he took on outside sales. His next change was to create a rotation for the emergency services line and his last change was to be home before six each evening. These changes were deeply meaningful and empowered my father the engineer to value how he was processing life on an emotional level and not take himself as seriously.
Lesson – Even if you are 48 years old and have been building in a single direction for the last 25 years, if someone you trust sees that you are headed down a hole, embrace change.

The First Warning
My father’s analysis of the magnitude and the types of changes that were needed were spot on, but his timing might have been a couple years late. Six-months later my father and I were working on a boat when the onions from the hamburger we had just eaten started catching up with him, except it wasn’t the onions. A couple minutes later he looked at me and said, “I don’t think I should power through this one.” We immediately loaded up and were on our way to the hospital, 20-minutes later he coded in ER, 35-minutes later he was on the table in a Cath-lab and three hours later I was explaining to a very drowsy version of my father that the doctors were calling the event a “massive heart attack.” Later my father confided in me that without the first round of changes he would have powered through with his traditional pack-mule mentality and would likely be dead now. Instead, he had just received his first of three warnings that his time on earth would possibly be shorter than others and that now was the time for any other changes that he may have on his mind.

After that first warning and 4 months of recovery, he decided that waking up at 6am when he was still tired was not a requirement of his life. He decided that not everything had to be sorted out immediately and that there was time for the gym. He decided that fried chicken was good, but not worth dying over and he decided that there were places he wanted to see with the lovely miss Puddy, that needed to be seen. He bought an airstream, a pair of segways and loaded up the calendar with small town festivals. He made more time for my mother; they went to workshops on how to improve their relationship even though things were good and they renewed their vows. He made time for dinner with friends, and he made new friends. He renewed his passport and started leaving the country once a year and started visiting some of you that he had met through SilverTrading.net. Serious work was put into his life, and his smiles were lingering for longer periods of time.
Lesson – When you think you have made big changes in the person you want to be, there is always room for more.

The Second Warning
In the true fashion of our family, my parents were trying to soak up all that they could while on vacation in Canada, which resulted in a run through the airport to make the plane. The ticket clerk at baggage check had issued some form of statement like, “you will never make this flight sir,” to which my father looked at my mother, smiled and the running race was on. The joke was on the ticket clerk as he did make the flight, but despite his recent time in the gym, he had turned gray in the process and the plane was grounded until he got his color back. Warning number two was upon him along with another trip to the cath-lab, and another opportunity for growth.

This second warning was particularly frustrating as huge efforts had been made and great results had been reported, but there he was in post-op again with the evidence that the first warning wasn’t an error in the timeline. This second round of growth involved a trainer for the gym time, a cleaner diet and non-negotiable Friday date night. He grew a “three musketeers mustache” to make others smile. He got closer to his father, and he became closer to his faith. He read dad joke books to make sure he had an innocent joke ready to share each day. He started a young couples married life program with my mother to bring young couples through trainings that were designed to give them tools for the challenges of being married. He had a refrigerator covered in those couple’s birth announcements. He published the best of his past works in a book to give to clients, volunteered in the community and as a new grandparent there was no amount of spoiling that was off the table for the “girls.”
Lesson – There is an unbelievable amount of joy that can be mined out of this life if you are willing to work at bringing smiles to others.

The Third Warning
The third warning was a mild warning and came ten years later after a morning in the gym with his trainer. My father sensed something was off, didn’t push himself and left halfway into his hour. My mother saw that he was home early and asked what the story was, and then calmly called an ambulance. At the hospital everything checked out and looked good, but his doctor wanted to hold him for 24 hours to see if later enzyme tests developed results that evidenced high levels of heart stress. The next morning the enzymes confirmed there was a problem and the resulting die-test showed that there were 9 blockages around his heart. While the doctor presented the images, he used phrases like “ticking time bomb” and “widow makers,” and that under no circumstance would he recommend leaving the hospital. After completely falling in love with this life, he was on his way to the OR again as his condition did not seem to be improving. He called the people he needed to call and made the decision himself, that bypass surgery had the strongest odds for extending the clock for another 20-years. While waiting for the rest of the prep-team, my parents said all they needed to say to each other, which apparently was heart-warming as the nurses that were in the room broke into tears and asked for a minute. Moments later, he was wheeled away.

Things don’t always go as planned and unfortunately the bypass procedure fell into that category. The mechanics of the surgery were reported to have gone extremely well, as my father went on a short walking trip before night fall after the procedure, but the electrical side of the heart started showing trouble a couple days later and took much longer to settle in. The recovery took 18-months with various rehabs and an aggressive IV therapy protocol. All of which seemed to drive home the point that whatever he wanted to do and whomever he wanted to become, the time was now. So, he repeated his pattern and endeavored to grow more.

During the first six-months after the bypass his color came back but his endurance was still low. A trip to the mailbox became enough of a workout to warrant a nap. Which meant that this next round of growth would involve less gym time and more time with those around him. He developed even more patience for issues at work. Netflix was discovered and date nights were spent on the couch. Grandkids were a fixture in my parent’s house as much as they were in their own home down the road. My brother-in-law was given more freedom to grow into his role in the family company and family dinners were 4 out of 7 nights. Covid came and all of the routines became more digital. Our ten-minute international calls turned into hour long international calls. He became a regular skype guest for my son’s bedtime stories in the middle east during the middle of his workday morning. And story time with my nieces became an outright hazard for my sister, as my father refused to stop the stories as long as his little audience could stay awake. He would easily turn a five-minute bedtime read into an hour-long theatrical reading adventure with different voices for each character. Once out of covid, he was able to experiment with different IV therapies and a particular regimen started to work! His endurance almost matched his levels from before the bypass, and the plan going forward became a very simple one – “Do this for another 20 years!” However, this was not in the cards.

On the 30^th of August 2022, my father was having what can easily be called an extraordinary day. He woke and decided to put on a seersucker suit with saddle oxford shoes, a favorite costume of his that he wore on rare occasions. He went to work that morning at the drilling company and closed out the month of August to learn that they had just completed the single best month the company had had in over two decades. He had his regularly scheduled Thursday lunch with friends to discuss scripture and he was heading to the Silver Trading office to meet with an old client and friend for a quick appointment, that would have inevitably evolved into an hour-long discussion. Unfortunately, this was his day.

On the way to the elevator, he collapsed and despite paramedics being on the scene in a matter of minutes, a catastrophic failure in his plumbing had occurred, and just like that, he was gone. He went out doing what he loved, on a beautiful day, in the uniform of the southern gentleman from decades past, wearing a three musketeer’s mustache, that inevitably made several people smile even after his passing.

Besides his involvement in the family businesses, my father’s obituary listed a shocking number of civic activities. On top of these activities, he also maintained a habit of reading for an hour or two each morning on a broad range of topics. His brothers knew him as a history buff, people he sailed with called him a world-class story teller, customers who called Silver Trading knew him as someone familiar with monetary policy and monetary history, his lunch friends knew him as a biblical scholar, his young married couples knew him as a walking relationship toolbox, his employees knew him as a friend and often a parental figure, many local businessmen knew him as the person to call when you need to think your way out of a business corner, little ones knew him as a joke-teller, almost everyone knew him as a gentleman, my mother knew him as her best friend but my sister and I just knew him as a really great Dad.

For those that read his work and may have enjoyed a conversation with him, please know that he deeply loved the Silver and Gold world and the thousands of people he met through it. In the coming months I will start uploading his articles at www.TheSophisticatedChimp.com, along with my own articles for those of you that would like to read or reread his work.

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Christopher LaBorde

The Keyboard Chimp

Christopher LaBorde, his wife and their two children, live part time in the Middle East and part time in Louisiana. As a curious engineer and novice researcher that studies a multitude of topics, Christopher always welcomes feedback at Chris@silvertrading.net and www.TheSophisticatedChimp.com. All of Christopher’s writing is made possible by The Silver Trading Company www.SilverTrading.net, please allow us to help you with any of your precious metals needs domestically or abroad.

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Infrastructure Problems Have Exponential Outcomes
I do not think that many US cities are anywhere near the same category as South Africa, but I do think that is very hard for an average person to fully understand the priority that needs to be placed on infrastructure. Many educated people are trained on how to think linearly, but very few of us have an intuitive feel for how to think exponentially. This is often displayed in thought exercise questions like, “Would it be better to be given a million dollars or a penny that doubled each day for a month?” or “If an NFL stadium was sealed and a drop of water was doubled every minute, how long would it take to swim out of the top seats?”. Most of us don’t have a natural feel for answers to exponential questions like these without a calculator. I could not have told you that a penny doubled for 31 days would be worth $10.7 million or that we could swim out of the sky boxes in 45 minutes. Unfortunately, it is this kind of thinking that is required to understand the impact of infrastructure failures as they cause compounding problems. It is for partially these reasons that I believe the people in city leadership positions may be underestimating the priority of infrastructure upkeep in reference to the cost of doing business in the US. Other contributing factors are that the city decision management structure is almost designed against infrastructure upkeep.

The People Problems Behind the Problem
Many challenges ultimately boil down to issues related to people. In the context of city infrastructure, it typically involves three key groups: the city engineering office, the mayor's office, and the city council. Engineers tend to grasp the technical aspects of the problem but may not fully comprehend its impact on business in the city. The mayor's office, while potentially understanding both the technical and business aspects, must also focus on reelection every four years. On the other hand, the average city council member often lacks a comprehensive understanding of either the technical or business impact sides of the issue and must also prioritize reelection. This means that in the typical team responsible for managing the infrastructure budget in a city, fewer than half of the individuals have a holistic grasp of the challenges they need to address, despite having to allocate a mammoth portion of their annual budget towards it. To complicate matters further, two-thirds of the team are motivated to use pieces of that budget for high-visibility projects with substantial newspaper appeal to support their reelection.

How Do We Compare?
The US spends an average of  1.5% to 2.5% of it’s GDP, or $382b to $627b / yr., on Infrastructure. In comparison to the European union this is a very small spend that equates to approximately half of what the European Union spends. If we look at the big three infrastructure costs, Electricity, Drinking/Wastewater and Transport; the picture becomes very damning very quickly, as we are behind. The following is a back-of-the-envelope calculation on what we would need to spend tomorrow to put our infrastructure back on track across the US.

Note:
-These numbers are similar to the numbers I was asked to calculate while working on an infrastructure project in 2011, but they seem to be growing.
-If you are not interested in infrastructure information and calculations, skip to “Totals.”

Energy Infrastructure
US Energy Generation
The average age of the 10,000+ US power plant fleet in 2018 was 29 years old, but in a 2023 report it had shifted up to 30 years old, meaning that US power generating equipment now has an average age equal to the average service life of these assets. Which means that if you assume 100% replacement and a 14.4 hour/day run-rate on plant equipment, the US would need 771,000 MW of gas turbine power production facilities to handle our annual 4,050-terawatt hours of energy requirements (excluding peak loading). Or, if we wanted to replace 100% with solar (not possible) and an average daily run rate in the US for solar of 5.75 hours/day it would require 1,930,000 MW of power production infrastructure. If you assume that both natural gas turbines and solar have plant investment costs of $1,000 / kW, the respective prices are $771b and $1.9t to completely replace our power generating infrastructure. An 80/20 GT/Solar combination would cost $1.0t. Or, if governments felt like investing more upfront and no longer dealing with the hassles of the politics of fossil fuels, $3.9t would probably cover the bill for nuclear.

Note: I have assumed a 100% plant replacement costs which is high, but there has been no cost taken into account of the remediation or demolition of existing plants & lands, which could also be high.

US Energy Grid
As of 2020, 70% of the grid transmission lines and transformers that move large energy loads around the grid were 25 years old, but much of the remaining 30% was older and had been built in the 50’s and 60’s with most of the distribution lines that bring the power from the transformers to the houses and buildings. The problem is that transmission assets and distribution lines have a 30 to 50-year service life, which means that many of these lines and assets need to be replaced. The US has 642,000 miles of high voltage transmission lines and 6.3m miles of low voltage distribution lines. If you assume that 128,000 miles (15%) of transmission lines need to be replaced at $3.9m per mile and that 5m miles (70%) of distribution lines need to be replaced at $175,000/mile, the grid needs a $1.15t dollar upgrade.

Drinking and Wastewater Infrastructure
14-18% of all treated water in the US is lost to leaks, according to a 2021 Mckinsey report. This number becomes a bit more tangible with the knowledge that every two minutes in the US a water main breaks and those leaks alone equate to the loss of 6 billion gallons of treated water a day, which is equal to 10,000 Olympic swimming pools or $9.8 billion in lost annual municipal water sales. As a result, it should come as no surprise that we use more than twice the amount of water per capita as other industrialized nations such as Germany, Japan and the UK; it also may not be a surprise that we pay 1/2 to 1/6 the rates of these countries for water when we seem to be comfortable with the current status quo.

US Water and Wastewater Plants
In the US there are over 153,000 publicly owned fresh water treatment plants and over 16,000 publicly owned waste water plants. Unlike the energy infrastructure, only 15% of these plants are past their design life. The drinking water plants and the wastewater plants can likely be replaced for $4m and $20m a plant respectively, or $92b and $48b in project costs for a total of $140b in plant replacement costs.

Note: Plant replacement costs were harder to come by, so more conservative numbers were used in these calculations.

US Water and Wastewater Grid
There are 2.2m miles of drinking water lines and 800,000 miles of sewer lines. The average age of liquid infrastructure pipes in the US are 40 years old, with 22% being over the 50-year service life age. The average drinking water line in the US can be replaced for $792,000/mile, and the average wastewater line for $845,000/mile. Replacing 22% of the liquid line infrastructure would cost $383b and $149b respectively, for a total of $531b in grid replacement.

Lead in the Drinking Water
On top of the mechanical degradation issues there are other concerning issues, such as lead in the water. The American Water Works Association has stated that over $1.0t is needed for replacing drinking water lines that are made of lead pipe. If we assume an 80% overlap between old drinking water lines and lead lines, the corrected total for drinking water grid replacement would be $1.23t.

Transport Infrastructure
Roads, Bridges, etc.
According to a 2021 American Society of Civil Engineers report, America’s road infrastructure is a “D.” The average age of the 614,000 bridges in the US is 46-years-old and 10% “are severely compromised,” with Americans driving more than 178,000 trips across these compromised bridges each day. The average age of the roads themselves are a little better, at 29-years old, but all of these structures are expensive to maintain. One study estimated that the US spent between $50-$80b in road maintenance in 2021, where another estimated that number to be $204b. No matter what the number is, scholars seem to agree that there is a significant spending gap. A 2019 Transportation for America study concluded that $231b for a six year period could get us back on track, with $62b/yr. for 6-years assigned to cover that gap. However, the $231b/yr. did not include any new road costs, and a 2011 report showed that the US was investing as much in road repair as they were in road construction. Most politicians are recognized for creating new roads, but none are recognized to committing the $24,000/mile in annual repair funds that are needed to keep those new roads in good shape. As a result, from 2009 to 2017 the US road infrastructure grew by 223,494 miles, providing enough new pavement to drive across the US 83 times. These statistics bring me confidence in the assumption that the US is still at least $300b short in spending of what needs to be spent to get back on track with its roadways.

River Travel - Dams and Levees
The average age of a Dam in the US is 57 years old and the average age of a levee is 50 years old, with respective design lives of 75 years and 50 years according to The Army Corp of Engineers. According to a 2021 American Society of Civil Engineers report, the US needs to invest $115b to bring all US dams and levees back up to functioning levels of service by 2030. This section had the least available reports, but a 2020 EPA report stated that their best estimate was that the sector was facing a $7b/yr. to $10b/yr. funding gap. The report also stated that they felt that this estimate was conservative and that this gap was only going to grow if unaddressed. With the above information I have made an assumption that the sector is at least 5 years behind where they need to be, and that a minimum investment of $50b would be needed to bring this part of our infrastructure back up to speed.

Ports
The US has over 300 ports that contributed to 26% of the GDP in 2018. The infrastructure requirements of these ports are extensive and are managed in large part by the US Port Authority. Of all the infrastructure sectors graded by the American Society of Civil Engineers in the 2021 reports, ports received the highest grade, a “B-“,. The report overview seemed to suggest that the ports may only be suffering from an annual $12b funding gap. I am going to make an assumption that this means that we are at least $50b down today, a remarkably low number for the amount of infrastructure covered by the sector.

Totals

• Our Energy Infrastructure needs $1.9t to $5.8t in upgrades to bring the sector up to date.

• Our Liquid Infrastructure needs $1.76t in upgrades to bring the sector up to date.

• Our Transport Infrastructure needs $0.4t in upgrades to bring the sector up to date.

• These three critical sectors require a minimum investment of $4.1t to come up to speed, and

• The annual infrastructure spend needs to be increased by an additional $200b/yr. to $400b/yr. to stay on top of maintaining our existing assets.

Some Good News
In 2021, Congress passed The Bipartisan Infrastructure Law, which provides $1.2 trillion over five years for all US infrastructure, including the many infrastructure sectors not discussed above. This is by far the largest federal commitment towards infrastructure in the last 40 years and credit should be given to this administration for this commitment.

Unfortunately, unless this is renewed regularly, the money will be spread too thin. An example of this is that $50b was allotted to the EPA for the water & wastewater sector to manage the $1t problem of our lead piped drinking water grid. Like a roof leak, if only a patch is applied to this problem, it will likely result in significant rot down the road.

Efficient Infrastructure Is a Force Multiplier
Clean water, effective waste management and efficient supply logistics were largely responsible for the 25% to 35% increase in human life expectancy during the times of the Roman empire. Years later electricity brought the work of a hundred men into homes and factories at the flip of a switch. These basics that we take for granted, represent thousands of hours of work a year that we save for minimal costs and “10’s” of years that have been added to our lives. However, when these basic services are taken away, an unimaginable additional load is added to the requirements of businesses to achieve success when operating in an affected area. The difference in workload is now comparable to the difference in making a car and having to make both the car and the road for it at the same time. So where are modern day cities’ priorities?

The Question All Cities Need to Focus On
We believe that all city management questions need to be distilled into a single query: "What can we do to enhance our city's density of highly productive and creative individuals?" These individuals require several key elements: high-quality education for their youth, elder care for their aging population, a healthy environment for social activities across all age groups, effective policing, fire services, emergency response, access to excellent healthcare, green spaces, well laid out roads and even the occasional dog park. By addressing these kinds of needs, a city can attract and concentrate these talented individuals and the companies they bring with them, as these kinds of people have the freedom to choose where they live. These individuals, in turn, attract others like them, resulting in the growth of tax revenues, an educated electorate, and well-informed city leaders. On the opposite side, any of the above efforts can be completely negated with a single press release on frequent power outages, inadequate water treatment, or a failed road system. Such news can deter individuals with options from considering a city as their home. No city wishes to find itself in a situation like Flint, Michigan, but the current state of our nation's infrastructure indicates that many cities are headed in that direction.

My Hope!
No matter how you cut it, infrastructure is the backbone of the future productivity of a city. When a city fails to stay on top of it, its fate has already been cast for coming years. I know some US cities will fall due to poor business bets that have caused them to lose their tax base, but for all the cities that are to remain vibrant in the coming years the quality of the city’s infrastructure is at the heart of its competitiveness. Both Italy and Japan are in the process of trying to sell old cities that have already been abandoned due to loss of tax base and failed infrastructure. If US cities are to remain relevant, the US has to maintain its infrastructure edge over many other countries around the world and bring more manufacturing home. I am sure that the $4.1t dollar estimate will grow to nearly double this number when other infrastructure sectors are taken into account, but I hope the US finds a way to prioritize these costs in the coming years. It may be wishful thinking, but this is city and state government, and a boy can dream can’t he! My fear is that these looming city / state expenses will be converted into looming federal expenses and will become the next driving force behind another round of money printing.

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Christopher LaBorde
The Keyboard Chimp

Christopher LaBorde, his wife and their two children live part time in the Middle East and part time in Louisiana. As a curious engineer and novice researcher that studies a multitude of topics, Christopher always welcomes feedback at Chris@silvertrading.net and www.TheSophisticatedChimp.com. All of Christopher’s writing is made possible by The Silver Trading Company www.SilverTrading.net , please allow them to help you with any of your precious metals needs domestically or abroad.

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When I tell people that my hobby is racing sailboats, I am always aware of the images that it often conjures up. There definitely were privileges that were afforded by our middle-class upbringing, but The Shreveport Yacht Club had no “yachts” and was based on the shores of a small chocolate milk mud-puddle. There was probably a total of 30-people in the city that knew enough about sailboat racing to get a sailboat around a racecourse efficiently, and a far bigger contingent that wanted to convert the club into a ski-boat storage facility. Membership costs were somewhere between a library membership and a YMCA membership, and hotdogs and hamburgers were the cuisine. All of that said, the location was outstanding, the people were great, and this was a great environment to become a student of a lifelong hobby that has introduced me to countless places and people.

One-design sailboat racing and investing are simple activities in principle. In the first, the goal is to sail the shortest & fastest path around a course. In the second, the goal is to buy low, sell high and never lose the principal. Despite the simplicity of goals of these activities, countless lifetimes have been dedicated to them with only a select few being able to consistently perform at the highest levels. The following lessons are the 30,000 foot lessons that seem to apply to both activities and are in no way investment advice, just observations.

Lesson 1 – Get Comfortable in Not Knowing, The Games are Played with Incomplete Knowledge
There is a very small number of racing venues around the world where the guiding variables are fully understood all the time. Almost all racing venues have geographic features above and below the water that react differently to slight changes in wind and current direction, and in most venues a 55% accuracy in a weather prediction is considered winning. As a result, most participants must be comfortable with defining winning as doing better on an average over a series of events versus an absolute best outcome. With extreme variables in play, you will never win every race if you are playing equally matched competitors, but a record of winning more often than not is the name of the game.

Lesson 2 – A Fast Boat Can Make a Team Look Like a Genius
With extreme variables in play, competitors must isolate the aspects of the sport that are within their control to take advantage of. Stiff boats are polished, controlled systems are optimized and team maneuvers are practiced and mastered under all conditions. Your team’s ability to be a slightly faster nimbler boat than the team next to you, often translates into compounding opportunities that only those in the front can take advantage of. Years of practice and preparation to remove all drag tend to significantly increase a team’s “luck.”

Lesson 3 – Research and Models Pay
Knowledge is power. Your team’s knowledge of the most likely scenarios to play out on the racecourse and the models that are built around taking advantage of those scenarios, translate into better decision making. A large percentage of sailboat racing is spent in reaction to the conditions at play. If your team is looking for indications of trends they fully expect to see, they will always be able to change course and commit faster than those who are waiting to see if the change is real. Without knowledge, your team is gambling and hoping that boat-speed will prevail. Even worse, with bad knowledge your team will commit to the wrong trends and leverage your position on the course in the wrong direction.

Lesson 4 – Leverage is a Double Edge Sword
A five-degree shift over a mile course can be worth a 100-yard lead. Leverage is powerful, but the shifts in wind and current are never known with absolute confidence and the same loss can be experienced in the converse. Consistently winning team seldom take highly leverage positions. Instead, most of them “play the fleet” and take a mild position on the side of the fleet (market) that they expect to make gains on, without losing the farm if things go the other way.

Lesson 5 – The Right Information on the Wrong Timing Will Kill Your Results
Most one-design sailboat races take less than an hour to complete. If an expected 30-dregee right-hand wind-shift comes in just as you had predicted and leveraged your position for, your team could gain an unbeatable position over the fleet. If it comes in a minute after the leg is finished, and your team was all the way on one side of the course when the other side continued to pay, your team likely experienced the opposite and lost distance into an un-recoverable position. Expecting well researched shifts is smart, highly leveraging your position for them is risky. Those who do this regularly have grand stories to tell at the bar but stand on few podiums, in the same way that derivatives traders can be hung out on the wrong side of a trade and take down entire investment houses.

Lesson 6 – The Playing Board is Not Fixed, It Shifts
Growing up on a mud-puddle lake, I knew nothing about the world of current. Every inch that you made through the water towards your mark was an inch you had gained over the course. My counterparts on the coast were learning a different game. They were learning that even if they were in the right place at the right time for a favorable wind-shift, they could still move backwards if they were in an unfavorable current. They couldn’t just play the game with the shifting winds above, they had to also play the game with the moving waters below; similar to how all investments require the consideration of the investment itself as well as the movement of the currency it’s in. In extreme cases like river racing, I learned that you could even make huge gains with a quietly dispatched anchor if adverse currents were temporarily too strong. In a similar vein, investments like precious metals are not likely to make you rich, but they can prevent your purchasing power from being swept away in inflation.

Lesson 7 – Volatility Can Be Tricky
Louisiana summers were known for heat and high-pressure systems, which translated in to light and shifty winds. These conditions often warranted chasing wind that you could see in ripples on the water, but it was not uncommon for these little breaths of wind to shut down completely or reverse in direction. Lead changes were frequent and the boat that won was typically the boat with the highest focus and knowledge of the conditions. Unstable winds are hard on the nerves and often require a “detached-attachment” to the game. Sailboat racers don’t have the option of opting out of the extremely shifty conditions, but investors do.

Lesson 8 – Trained Instincts Have Real Value
There is often significant value in having been there before. Racing hundreds of races in local waters can make a team’s “local knowledge” deadly when competing against out-of-town competition. Not only will the team know what to expect, they will often know it on a level that their subconscious starts to make the decisions before they are even aware of it. Sometimes the move is to follow the best local when you are in foreign waters.

Lesson 9 – Taking Flyers Can Win Races but Fundamentals Win Championships
The limited success I have had over the years in sailboat racing has occasionally made me the person to ask questions to while also providing me access to the world champions in the sport. I have noticed that when I am being asked questions, almost no one in the crowd wants to hear, “All I did was execute on the basics that are being taught to your 8-year-old right now.” Everyone wants to hear about a magic trick for speed that was performed on the course or a magic sign that signaled a shift that they can use next time. With rare exception, there is no magic, which has been confirmed time after time when I am the one asking questions and looking for magic from the sailors above me. All greats seem to have fundamentals that they live by, versus “flyers” they bet on, to stack their consistent progress into world class results.

Lesson 10 – The Game is Stacked Towards Resources
Life is not fair. One of my favorite competitors is a 48-year-old X-East German Olympic hopeful that was trained by the government from the age of 8. He has such an incredible head-start on all of us that we are just ecstatic to occasionally place higher than him in a race. Others have brilliant resources at their disposal for the best gear, endless coaching, and professional crew. In the same way that industry knowledge and access to Bloomberg terminals may be hard to compete with when picking trends.

10 Ingredients of a World Champion Sailboat Racer (and Possibly a Respectable Investor)
An average finish of 4^th place over a weeklong series of races typically wins a world championship. It feels outstanding to be the race leader in a massive fleet, but often the risks that are required to get there are indicative of habitual decisions that are harmful to results over a long period of time. Consistent gains made from regularly winning plays are the foundation for most regatta winners, and those winners typically shine in the following areas:

• They are comfortable making decisions with incomplete knowledge

• They make sure that their vehicles/team will never be their reason for losing

• They know that there is no substitute for homework and practice

• They know that leverage is to be handled carefully

• They know that even though a trend is definitely coming, the timing can be the most valuable part

• They know that gains aren’t measured in distance through water, they are measured in absolute distance to the mark (purchasing power)

• They know that volatility and unsteady conditions can provide large opportunities for gains, but require careful attention to prevent losses

• They know that a person who has been in that location a thousand times doing what they are doing is someone that should be paid attention to

• They know that the fundamentals are typically the right decision, which is how they became “the fundamentals,” and

• They know that to play the game at a very high-level, both time and resources must be invested

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Note: Again, this is NOT investment advice, but observations to what I have noticed in three decades of playing around on boats. If you found anything in this article entertaining or educational, please share it with a friend or on a social media platform.

Thank You!

Christopher LaBorde
The Keyboard Chimp

As a curious engineer and novice researcher that studies a multitude of topics, I always welcome feedback at Chris@silvertrading.net and www.TheSophisticatedChimp.com. All of my writing is made possible by The Silver Trading Company www.SilverTrading.net , please allow them to help you with any of your precious metals needs domestically or abroad.

“Backed” is not “Pegged”

The key to understanding the brilliance of this dollar trap lies in the concept of a “gold-pegged” versus a “gold-backed” currency, so a little review of history may help the understanding of the mechanical differences between “pegged” versus “backed” and why it matters.

The recent history and problems with being “gold-backed”

Precious metals-backed currencies required a specific quantity of precious metal for every dollar unit in circulation and were the desired standards for currencies for centuries, but these standards made it hard to grow the money supply for both legitimate and illegitimate reasons. In 1965 the US got called out by France in a colossal game of “chicken,” when France sent war ships over to the US to turn in their US dollar reserves for gold bars. They knew we had been growing our money supply faster than our gold reserves and planned on capitalizing on our stretching of the truth, so we rapidly changed the rules of redemption and then left the gold standard all together in 1971. In 1978 the IMF member countries decided to formally block the use of precious metals to back currencies going forward. For years, critics of these metals-backed standards had stated that when the population grew faster than gold could be mined, the money supply would shrink and force deflation, which would inevitably slow that economy down. For the low population growth countries of Europe this was less of a problem, as countries like France had only grown 2.5-X over the last 250 years versus the United States which had grown 132-X over the same period. This need for increasing the supply of gold on the same timeline as the population growth was a recognized and documented problem, but it was tolerated, as unpegged free-floating currencies had (and still have) their own problems, as they have always been abused by governments to create unseen inflationary taxes by quietly increasing the money supply and devaluing the currency.

Governments’ Love Affair with Free-floating Currencies

To understand the money supply / political relationship problem you don’t have to think very far. If you can imagine a honest and loving politician campaigning for election and promising to improve and increase services above the current standard, you’re already halfway there. Now imagine what happens when the politician must try to remain in office, deliver on their promises and not increase taxes or borrowing. All too often over the history of currencies this has played out, where instead of using an unpopular tax to take money out of your pocket, the politician just creates more money in total and makes the money in your pocket worth less. For an honest and moral politician this ability to “just print a couple extra dollars” is very tempting, for a politician of lesser standards it becomes an incredible power that cannot be resisted. Which is the reason that proponents of gold backed currencies have traditionally loved them, they take away the options from the governments for printing or borrowing additional dollars and require them to go to market and buy more gold if they want to create more money. Another recognized challenge with free-floating currencies is stabilizing their value when they are not backed by a commodity.

The Difficulties of Free-floating Currencies

All major modern currencies are free floating currencies that face the stabilization problem. Behind the scenes, economists use formulas to wage bets on currency demand and then use financial instruments to regulate the supply of money to try to maintain a consistent value per monetary unit. In an ideal world, the value of the money remains close to constant, and the money supply expands and contracts at the same rate as the changes in the demand for the money. In the real world the value is not constant and is often adjusted in relation to other major currencies to maintain trade relationships. As a result, stable becomes a bit of an illusion and the winning currency is just the least inflated one due to the spending needs of its country. Unfortunately, money supply manipulation is not an exact science, and when it goes bad it can snow-ball out of hand with rapid declines in value that can cause hysteria or sudden increases in value to the point of freezing the economy. As a result, many countries choose to “peg” their currency to one of the top currencies in the world, which provides a hybrid option to a pure commodity backed currency. These countries choose to let the other country worry about the money supply gymnastics and they simply have their own money that is worth a fixed value against another currency, but this too has its problems.

“Pegging” is Slaving

When a country decides to “peg” their currency to the dollar, they essentially are making a promise to inflate their currency at the same rate that the United States Fed is inflating the dollar at. Every time the US prints more money, the country must print more money and every time the US tries to send financial instruments into the market to reduce the dollar supply the country needs to do the same, to some degree. In theory the timing of all of this all happens in absolute synchrony, in practice the country’s money supply just needs to be somewhat growing and shrinking in similar time with the dollar. This makes pegging a currency a much easier operation than fully managing a country’s money supply against the velocity of its money, in order to do this, the country must give up their option to inflate their way out of debt. The problem with pegging to the US dollar is that the printing mistakes of the Federal Reserve become the inherited mistakes of the pegged currency, but what if there was an inflation countering mechanism to use with the “peg?” This is precisely what the BDB (BRICS Development Bank) Gold “pegged” currency aims to do.

Best of Both Worlds?

The gold pegged currency of the BDB does not want the troubles of dealing with money supply and gold store issues for a gold backed currency, especially when it would require all participant countries to maintain high stores of gold for money supply regulation. Nor does the BDB care to deal with the hazards of a free-floating shared currency that participating countries all must also manipulate for their own needs (the Euro disaster). Instead, the BDB has indicated that it will peg itself to the stability of the dollar, but through the dollar / gold price relationship. Meaning that if the US government minimizes their inflationary printing and the gold market doesn’t go crazy, the BDB would be effectively securely pegged to the dollar, but if the US government continues their policy of printing dollars to deal with their debt and market issues, the value of the BDB currency will rise against the dollar with the price of gold. So, is this really a great bet on the BDB part?

It's Complicated, Like a Russian Chess Move

The short answer is, “Yes, but it’s complicated.” In theory, the BDB currency, once in place like the constrictor, doesn’t have to aggressively go after its prey, the dollar, it just has to stay alive, close by and wait for it to struggle a bit. Any wiggling that takes place with the dollar could become an opportunity for the BDB currency to gain strength. In practice, however, the gold market is on record as being heavily manipulated so why would the BRICS and their affiliated countries even consider this? Controlling 78% of the world’s oil reserves and 36% of the Global GDP is always a good start to a power play, but many of these countries have also been leading the way in recent gold acquisitions for central reserves. Admittedly they are far behind the stated gold reserves of the United States, but if they were to set the BDB currency in motion any future purchases of gold would only potentially strengthen their position (and intensify the squeeze) and make their currency worth more. On top of that, gold is now 5,500%  stronger than the dollar since abandoning the gold-standard while the M2 money supply has approximately increased by 5,200% over the same time frame. If history is any indication of how the future may go, this move by the BDB appears to be a very strong move over the long run that could put a serious nail in the US dollar.

How Could This Play Out?
Once the BDB python currency snuggles up with the dollar, the dollar may not have the breathing room it needs to print itself out of trouble. This could force the removal of the inflationary tax option from the arsenal of the Fed all together, which would signal the end of the game for how the US currently handles its debts and struggles and possibly be the end of the dollar. As US debt numbers start to become numbers that only trained astronomers can understand the magnitude of, simple arithmetic shows that the current pathway for the dollar is not sustainable and most countries have to see this. So, the BDB currency may quickly turn into a hedging option for those countries looking to distance themselves from the risks that the dollar may present.

Or
This could become a key moment for the US to pick a fight with one of the larger players behind the BDB in a last-ditch chance at a divide and conquer move. This would include an international defamation campaign, and multiple other ploys to prevent an alliance from forming with the BRICS and their applicants. The BRICS alliance meeting that began today, Tuesday the 22^nd of August and will end Thursday the 24^th, may be one of the most pivotal moments in recent monetary history. The US has been known to pick fights, or support fights with those who threaten the dollar, but this time there may be too many countries already signed up.

Christopher LaBorde
The Keyboard Chimp

Christopher LaBorde, his wife and their two children live part time in the Middle East and part time in Louisiana. As a curious engineer and novice researcher that studies a multitude of topics, Christopher always welcomes feedback at Chris@silvertrading.net and www.TheSophisticatedChimp.com. All of Christopher’s writing is made possible by The Silver Trading Company www.SilverTrading.net , please allow them to help you with any of your precious metals needs domestically or abroad.

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The History

In October of 1973, the US, UK, Netherlands, Canada and Japan were the targets of an OPEC oil embargo that increased the price of oil from $3 a barrel to $12 a barrel in a matter of months after they chose to support the Israelis in the Yom Kippur War. In the four years prior, Nixon price ceiling policies had doubled our dependency on foreign oil and 83% of that oil came from the Middle East. To make matters worse, in the three prior decades, US industry and consumers had become drunk on stable cheap energy, built an entire infrastructure and prosperous economy that was dependent on prices remaining low, and had firmly closed the door on any form of alternative energy options (nuclear). The sudden 4-X spike in oil prices over a 3-month period from this embargo created a real shock to the US way of life and threatened to cripple the US economy. OPEC had our attention and its un-official leader, Saudi Arabia, was in a good position to listen to proposals from the US.

In late 1973, A deal was made to end the embargo in early 1974 and pull the United States out of the Oil Crisis. Despite the US being in a tight spot, the negotiations created a deal that benefited both countries unimaginably over the following 5 decades that was described in a May 2016 Bloomberg article.

The gist of this deal can be summarized in the following two reciprocal agreements:

Agreement 1.

• The Al Saud family, the ruling family of the Kingdom of Saudi Arabia, agreed to sell the US oil at a price that we could live with if we agreed to become their defender and supplier of military equipment - This helped ensure the family and the kingdom’s position in the region and provided a great customer for the US military industrial complex over the next 50 years.

Agreement 2.

• The Al Saud family also agreed to buy an unfathomable amount of U.S. treasuries with some of the proceeds from the annual oil purchases - This helped back the Saudi Arabian currency with dollars while providing the U.S. economy with a very healthy and regular dose of liquidity.

This two-part mutually beneficial deal allowed the US to continue to spend money and have the stability of OPEC’s energy reserves behind it, while providing support for the kingdom and its ruling family. This deal has been active for multiple administrations up until this very day despite some rough waters, but as you will read, it appears to be changing.

Recent History

In 2015, a freedom of information act was filed in the 9-11 investigations that sought reparations from the Kingdom of Saudi Arabia based on the participation of some of its citizens’ roles in the bringing down of the twin towers. During the following years the Obama administration maintained the position that the KSA government could not be held responsible for the action of a few of its people, and the treasury / petrol dollar deal maintained its mutually beneficial terms. The PR troubles of the deal were then inherited by the Trump administration, who quickly realized the value of maintaining the trade relationship and worked hard at continuing to have the kingdom recognized as a pro-US ally and one of our primary supporters in the region against the backdrop of an unstable nuclear Iran. Officials from the Kingdom suggested that the US get its political house in order rather than bring the 1973 deal to light for the full scrutiny of the general public to digest; and the Trump administration saw an opportunity to ask the kingdom to be the fulcrum for a “Peace in the Middle East” deal.

In 2017, the then 32-year-old Mohammed Bin Salman “MBS”, the emerging leader of the kingdom, was in the process of both fully securing his leadership position and managing a country-wide corruption clean-up campaign. In many discussions with Saudi nationals the prince’s cleanup exercise was seen as a god-sent action that put the country back on track. However, in the U.S. the press chose to cover the event from the point of view of an old-school coup playing out on live television, which served the press well and renewed U.S. / K.S.A. tensions. Despite another round of disturbances in the optics between the countries, the deal survived and continued on.

In 2018, after the “house cleaning exercise” was cooling down the young millennial prince emerged as the clear leader for the kingdom and the Trump administration vowed its support for him and the continued U.S. / Saudi alliances. The idea was to bring things back on track as quickly as possible and start working with the new normal. Unfortunately, it was later determined that someone in the young prince’s afterguard was not in favor of how he was being spoken about after the house-cleaning exercise and independently took matters into their own hands to quiet down the opposition.

On October 2nd, 2018, the unfortunate result was a journalist and son of a powerful family that had been promised a diplomatic position in the pre-housecleaning KSA regime, entered into the KSA Embassy in Turkey and would never exit. As a result of the rogue actions of a staff member, the young prince became embroiled in a freedom of the press / human rights scandal with the apparent assassination of a reporter and outspoken critic of his administration. The PR situation only became worse in the US press as MBS appeared to not fully realize the crimes he was being accused of. The problem was that with each stab from the press, MBS felt as though he was being personally wronged, and with each response from the prince, the U.S. social media public gained a deeper split with the Kingdom. As the Kingdom was gaining new foreign eastward facing ties, this was quickly becoming a bigger problem for the US than it was for the Kingdom.

In late 2019, a very exposed relationship between the Kingdom and the U.S. became a campaign topic for Trump opposition. There was no shortage of Western judgment for the Kingdom, and it became an important point for critics to associate Trump with, but the deal and its steady flow of cash that made the U.S. way of life possible was never up for discussion. This was clearly a challenging time to keep the full nature of how much the U.S. needed the kingdom under control and away from the press and the U.S. public. A win from the Arab region was needed and it was needed fast to cool down growing negative sentiments from the U.S. towards the kingdom if the deal was to remain intact.

In Q1 of 2020 the Abraham Accords campaign went into full force. With a renewed desire from both parties to refresh their relationship and get back on the “right foot” the idea of “Peace in the Middle East” was hatched as a new goal to focus on. The strategy was that such a grand goal could wipe clean the slate between the U.S. public opinion and the Kingdom of Saudi Arabia, and the two countries could find themselves looking at a new deal for new hope in the region. In short, the Abraham Accords aimed to reconcile centuries old tensions between Middle Eastern nations sharing Abrahamic religious ties. This deal had been discussed since the beginning of the Trump campaign, but its timing was needed and looked like it could possibly bring together the Arab world with Israel. For years the Arab world had not acknowledged Israel and Israel had not acknowledged Palestine. The deal was designed to slow tensions between the warring neighbors and to start to bring trade between Israel and all of the Middle East.

On August 13^th, 2020, the Abraham Accords were signed and Israel was free to trade technology with the Arab world and “the greatest peace deal” of all time was signed. However, in order for this concession to be made, the KSA prince would have to show weakness on some level with the people of the Arab world because it is widely understood that the Palestinians have long suffered at the hands of the Israelis. As a fierce young leader this was not a concession that would easily be made, so the concession deal that was struck was a deal for access to restricted US defense technologies. The U.S. would have to agree to sell full capability F35’s to the K.S.A. and the U.A.E. militaries, something that had never been allowed.

On January 20th 2021, president Joe Biden took office and the “catch” to the deal was discovered. In this case the catch was that the deal was signed with the Trump administration, not the Biden administration, and after the administration change, no full capability F35’s would be allowed to be delivered to the K.S.A. or U.A.E. military. The Biden administration decided to not honor that part of the deal and then decided not to acknowledge MBS as the current leader of the Kingdom of Saudi Arabia. The administration then decided to double down on declaring MBS personally to be a very unpleasant person and an enemy of human rights, despite the incredible changes taking place for women’s equality within his Kingdom at that very moment. As you may imagine this was not the prince’s G-20 membership welcome that he felt he was due, nor one that made much sense for what was at stake for the U.S. and its economy. Unfortunately, Biden’s political posturing also watered down the goodwill of the accords and prolonged the tensions in the relationship triangle between the Kingdom, Israel and Palestine, but Biden’s tone towards KSA was about to shift.

On February 24^th, 2022, Russia invaded Ukraine. In the months following, Europe had to find a new energy supplier as Putin shifted Russia’s supplies East and the price of all energy climbed steeply. President Biden then made a plea to OPEC to increase its supply to help ease the price of oil that the U.S. was starting to experience because of the shortage, but as you can imagine, the plea fell on deaf ears and the execution of one of the fastest full Karma circles recorded in international history took place.

On March 3^rd, 2022, in an Atlantic Article, MBS suggests that President Biden should be concerned about the cares of the United States as it is not something that he himself is worried about any longer. MBS also clearly communicated that he was no longer concerned about the U.S.’s view of him or his kingdom’s actions. He stated that he will still do business with the US as well as many other countries, but that the US should probably pay more attention to their own country than to his. The article also mentions that MBS felt snubbed by the U.S. for assuming he was responsible for the death of the reporter and that that Biden refused to acknowledge his position as leader of the Kingdom of Saudi Arabia. In the clear text of this article, it can be read just how much damage had been done by the president to the relationship between the two countries in the 14-months since he took office.

On March 15^th, 2022, The Wall Street Journal announced in a headline, “Saudi Arabia Considers Accepting Yuan Instead of Dollars for Chinese Oil Sales”, which proved that MBS was remaining true to his statements that he was exploring trade relationships outside of the US and the petro-dollar. The article explains that there are many difficulties in a move like this but that some of these difficulties can be mitigated and will likely be considered. This act seemed to suggest that the Kingdom was actually willing to make moves away from the petro-dollar deal and that the Biden administration’s political posturing had consequences beyond the OPEC request being denied.

On May 31st, 2022, the U.S. had imposed the final SWIFT sanctions on Russia and opened the door for Russia to negotiate oil deals with China – Also Not In Dollars. Had this been done at any time before the sanctions were initiated, this act would have been considered an act of aggression to the United States and a possible act of war against the United States of America and the “Petro-Dollar”. However, in this instance it became a basic chess move in response to the weaponization of the SWIFT system and the sanctions placed against Russia, a move that the US encouraged and opened the door for. As business dealings appeared to be moving more East, this weaponization of the SWIFT system forced the hands of OPEC members to also consider the possibility that the timing of a dollar exit may not be here, but an alternative may be wise to consider, and the news outlets started to report that many other countries were feeling the same.

In July of 2022 the Arab news media started to cover stories of talks of the Kingdom moving into the BRICS alliance (Brazil, Russia, India, China and South Africa). In May of 2023 the story had progressed to a Bloomberg article with the title, “The BRICS Bank Wants New Members as Saudi Arabia Looks to Join”. Besides Saudi Arabia, it was also reported that eight other OPEC member nations have been reported to have applied for membership to the BRICS alliance, including: Algeria, Angola, Congo, Gabon, Nigeria, Iran, United Arab Emirates and Venezuela. When you include the existing BRICS countries, the OPEC countries that have applied and other oil producing countries that have applied to the BRICS alliance (such as Iraq, Kazakhstan, Mexico, Indonesia and Argentina) the list includes 19 of the top 25 oil producing countries in the world. These countries also represent up to 78% of the world’s oil reserves and possibly 36% of the global GDP, at a time when the US GDP only represents 25% of the Global GDP. I don’t suffer from the idea that these vastly different cultures will suddenly be able to get along and sing in harmony, but it should be understood that the US led weaponization of the SWIFT system clearly signaled something to these countries. That message intended, or not, might have been that the US is willing to default on their promise to accept dollars your country holds in reserve for trade if they do not like your politics. If that was the understood message, you can see how this may be very upsetting to countries who hold large sums of dollars in reserve.

On August 9^th 2023 it was reported by the Wall Street Journal that the Biden administration had finally switched on to the gravity of the situation and was now working to repair relations with the kingdom, and that they had started trying to negotiate around the very topics that have been covered in this article. Ironically, 31-Months after the Abraham accords deal was damaged by the current administration; the administration is now trying to use this very deal as a vehicle to repair US / KSA relations and move forward. On the cover of this updating of the Abraham Accords, it is being actioned to bring Palestine and Israel to more peaceful terms. However, the meat of this deal for the US may have more to do with Saudi Arabia’s growing relationship with the BRICS and assurances that KSA will not include Chinese military bases within the kingdom or the pricing of Oil outside of the dollar. The Kingdom has clearly stated that they are not ready to fully agree to a deal with the US at this time, but that if they move forward, they will be requesting additional security guarantees and access to civilian nuclear technologies. The US has always refused sharing US nuclear technology with the region, but the Kingdom understands their current leverage with Biden’s prior actions towards the Kingdom and the timing of the upcoming August 22, 23 and 24^th BRICS summit in South Africa, where Saudi Arabia is expected to be in attendance.

Hopefully next time you are at the pumps you can reflect on our relationship with the Kingdom and how it has been part of a delicate balance that has helped facilitate the U.S. way of life for the last 50 years. Kings and presidents have come and gone but the support that these nations have had for each other have been part of the fabric that have made the existence and growth of both nations possible. However, it is under these very different times that these arrangements are changing, and these changes are not small changes. Many of you will read this and think that the U.S. needs to make itself more independent, and I would agree with you that there is great value in that; we just need to carefully consider the timing, the price of those actions, how this will shift the political landscape and where this will leave the US dollar.

What to do in the meantime?
In no way am I writing to say good or bad things about the United States or the Kingdom of Saudi Arabia, I am writing to say that part of the bedrock that the US dollar has built on over the last 50 years may be changing. I suggest that readers keep a keen eye on the headlines that involve OPEC or BRICS nations, as subtle headlines buried far off the front page may be the headlines that harken the news of a new trajectory for the dollar over the coming decade. As discussed in the last article, the US dollar has other pillars underneath it, but it’s always a good idea to keep an eye on the bridge footings.

Note: If you have found any of this interesting please do share it with someone else for discussion and if you like the idea of energy independence you may enjoy the Nuclear Now documentary.

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Christopher LaBorde
The Keyboard Chimp

Christopher LaBorde, his wife and their two children live part time in the Middle East and part time in Louisiana. As a curious engineer and novice researcher that studies a multitude of topics, Christopher always welcomes feedback at Chris@silvertrading.net and www.TheSophisticatedChimp.com. All of Christopher’s writing is made possible by The Silver Trading Company www.SilverTrading.net , please allow them to help you with any of your precious metals needs domestically or abroad.

The Faith Drivers of the US Dollar
The strength of the dollar comes from its users and holders, but their choice to use and hold it comes from their faith in its value. That faith has traditionally been driven by the warm feelings people get around the pillars of the dollar, such as: US politics, the US economy, the US people, the might of the US military, its world reserve currency status with the international banking system and its petro-dollar status. With five out of six of those backers of the faith appearing to be occasionally taking day trips to Crazy-ville; it could be said that the warm feelings behind the dollar have seen better days. Yet the buyers of our debt and the users of our dollars appear to be continuing on a steady path despite our annual interest payments now surpassing the trillion dollar mark. Is there another pillar keeping the dollar steady, such as the “tech-dollar,” and if so, could it prolong the dollar’s reign?

The “Tech-Dollar” May be Our New Dollar Crutch
It is in this dollar climate that a new backer may emerge, the US tech-dollar. I personally think that the US entrepreneurial fighting spirit is mercenary in its nature and not philosophically tied to any particular currency, but as luck would have it, the dollar is the devil these talented entrepreneurs know. So now that it appears that the tech sector is possibly gearing up for a larger run at the financial services world, there is a chance that the dollar may become the unsuspecting benefactor of an advantage built by proximity.

Could the Tech-Dollar be More Relevant than the Petro-Dollar
In a well written piece by a tech entrepreneur on substack, it is clearly laid out that the enterprise business of the world wide web is largely run on software packages priced in US dollars. These business software solutions that are used to power commerce around the world, require US dollars to purchase them and appear to be another strong leg that we are standing on that allow us to print dollars without significant ramifications. However, of the $96T spent across the globe last year, approximately 1% was on enterprise software, 10% was spent on energy and 23% was spent on financial services. So according to the math, the tech sector would have to aggressively go after some of the entrenched banking incumbents’ highly protected market share for the tech-dollar to materially become a serious challenger. The only reason that I can see for highly lobbied regulators to allow this to happen, is if it was part of greater measures to save the politicians and strengthen the dollar. Consider the force that an industry that controls 23% of global GDP can wield, and know that even with all that might, it appears that changes are coming. But why now?

The Question that Wasn’t Being Asked?
Since the first crypto purchase of pizza in 2010 for 10,000 bitcoins was executed, a world of new possibilities has been upon us, but possibly the biggest gift that was given to us was the gift of a great question, “Is the current financial system still a good and healthy system?” For years this question was typically asked by silver and gold bugs who all seemed to be aging out of mainstream conversation, but the Bitcoin experiment brought this question right back to the forefront. In 2015 I was quoted in Forbes Middle East saying that the world has never moved backwards in technology efficiency if given enough time and that the bitcoin experiment has showed that more could be done in basic banking for less energy and expense. At the time I had hoped that some of the GCC countries would open their doors and welcome the new technology and its ecosystem of developers, but I also knew that the Western bankers and the US dollar were not going down without a fight.

What is the Value of a Good Question?
At the heart of this fight was the efficiency of peer-to-peer transaction trust. In one corner we had (and still have) an archaic banking system that requires countless human interventions with countless flaws that is regularly hacked and charges ridiculous fees for electronic transfers. In the other corner we have a system that can perform the equivalent of an international wire transfer for a fraction of a cent, in a fraction of the time, with a higher level of security than available in the current system. On top of that, the possibilities of smart automated contracts go on endlessly, but I digress. Each time the merits of decentralized digital banking were sung, a question was forced upon anyone listening, “If this is revolutionary, what goes on in regular banking?” And just like that, the magic act of US banking had lost some of its power. Unfortunately, digital banking was not only about banking services, it was also about a completely separate and independent currency that could be traded outside of the global tax systems.

Poking the Biggest Bears
The top governments on earth are predicated on a couple of basic sovereign privileges; the right to a standing army, the right to manipulate their judicial system, the right to tax their people and the right to manipulate their currency (hidden tax). Whenever any of these government rights are challenged the country instantly finds itself in a form of mortal combat, as the country may no longer exist if enough damage is done to any of these four pillars of its existence. This was precisely the fight that the US government, and all large governments, found themselves in during the 2021 crypto-currency bull-run when the last two of those pillars were threatened. Several attempts had been made prior to this bull run to kill the new digital currency sector with branding exercises, threatening regulations and tax scares, but digital currencies were still gaining momentum. Unfortunately, for the governments, the underlying technology had shown too much promise for the tech sector and the world was gaining an education on the deficiencies in traditional banking practices. Unfortunately, for the digital currency space, these governments have incredible resources at their disposal when they take aim at something. So, a long-term fight was formally initiated that will not go away and will likely fundamentally change the world and the way we operate, but in the short-term the dollar had (and has) to figure out how to remain competitive.

The current boxing rounds seem to have produced the following results:

1. Governments desperately want to create their own digital currencies to keep ownership of the currency and its manipulation. This scenario would allow the governments to pick and choose which aspects of digital currencies they want to support, including the end of anonymous purchases by mandating full transparency of all transactions globally.

2. The US banking system was given a public grade of “Needs Improvement” and it appears that the tech sector may have less regulatory resistance for moving into the financial services space to prevent the dollar from being taken down along with the banking system.

These results appear to have fueled the following events:

July 20^th, 2023 -Fed Launches FedNow
The federal reserve bank, the privately owned “bank of banks” for the United States found themselves in need of an update to help slow down the general threat of a migration away from the dollar and US banking. When they realized that the full scale roll out of the United States Digital Currency “USDC” was not going to happen in the near future they scrambled to offer the “FedNow” program. After 92 years of presiding over the special privilege of determining how much money different banks would be making, they have suddenly offered the ability to securely transfer money for pennies versus tens of dollars. This opt-in service for all US banks, is a stop-gap measure to slow down the migration away from the current banking system into digital currencies outside of their control. However, only a small fraction of the banks have agreed to the service because fees extracted for basic electronic transfers from one domestic account to another represent large portions of the bloated income for many US banks, despite it being a free service for many other developed and emerging nations. Did we mention that 22% of all monies spent on the planet each year goes to financial services.

August 2^nd, 2023 – “Apple Bank” Hits $10 billion
On October 20^th, 2014, Apple Pay was launched creating a digital / physical payment platform for all iPhone holders. The feature was launched as a convenience feature with no real threat to the financial services industry. In 2022, after mainstream questioning of banking services, Apple starts discussion on Apple Pay Later. On March 28^th, 2023, the Apple Pay Later service is launched, and a clear crossing of the tech-finance boundary was crossed. The significance of this cannot be under-estimated as companies like apple have user data that banks could only dream of, which means Apple could be the most profitable lender in the space with their data advantage to avoid bad loans. On April 17^th, 2023, Apple introduced its High Yield Savings account, a clear step into the world of banking, and within 106 days had over $10 billion in assets. This makes Apple both the largest FinTech company and the fastest growing challenger bank in the world; and provides strong merit to Citibank’s CEO Jamie Dimon calling out Apple by name in an investor letter as one of their biggest competitors going forward.

August 7^th, 2023 – PayPal is Allowed to Launch a Crypto On-Ramp
Twenty years ago, Paypal recognized the need for secure online digital transactions and created the first mainstream digital wallets to be used on the internet. On August 7^th PayPal announced that it had launched a stablecoin digital currency based on the USD, something that was supposed to be the domain of the US central digital currency (US CDC or USDC). Currently there a multiple stablecoins that are pegged to the currency that they represent, but this appears to be the first one attached to a large trusted outward facing consumer brand. An example of preventing a large consumer brand from moving into the digital space happened in 2019 when regulators stopped Facebook, now Meta, from launching Libra, a Facebook based digital currency, stating that it could upset global financial stability. The prevention of Libra proved that dangers of cross-border currencies are clearly recognized as a threat to the sovereign currencies, but the allowance of PayPal seems to be a recognition of concessions needing to be made to possibly buy some time for the dollar. However, this was not a small move, as PayPal has been recognized as the second largest non-bank global lender, behind Visa, with over $74 billion dollars in accounts and over $3.7b in daily transactions as of June 6th of 2023.

Elon is on the Move
On April 14^th, 2022, after the 2021 crypto hysteria and Apple announcement to cross the tech-finance barrier, Elon Musk initiates conversations to purchase Twitter and concludes the purchase 190-days later. On July 31^st, 2023, Twitter was rebranded “X.” Most people are unaware that X.com, was the name of Elon’s 1999 “financial everything company” that merged with Confinity to make PayPal, and it is no coincidence that Elon has rebranded the bird with the same name. When Elon bought Twitter, a company that had never turned a profit, the global press was confused on the economics and wrote it off as a mis-guided free-speech passion project. However, it probably should have been assumed that this century’s most successful entrepreneur may have had a plan. From a free-speech philanthropy perspective the purchase became a PR disaster, however, from an instant user-base standpoint Elon paid $46 billion dollars to have direct access to a trusted platform that was already on 400 million phones around the globe. If his plan is to dust off his playbook from 24 years ago and move into the financial services space, he just shaved a decade of work off his product adoption timeline. The first clue that this may have been a financial play was when he turned twitter into a two-way payment model when they initiated user verification payments and then started sharing advertising revenues. With his background, the twitter platform and the current environment of tech companies being allowed into the finance space, it appears that Mr. Musk may be riding a bird into the “trillionaire” spot after a sports car, a rocket and a boring machine only got him part way.

The Entrenched Incumbents
As much as this article has focused on the door being opened for tech companies to move into finance, it’s worth noting that the incumbents in the space are not small and will not go easily. As of March 2023, JP Morgan, the largest bank in the US, has $3.744T in assets and processes $9.8T a day in transactions, which according to S&P rankings is only good enough for the number 5 spot on the list of the top 100 global banks. Though these entities are old and slow moving, the are deeply entrenched in the inner workings of each government’s legislative sausage factory and dethroning them could be tricky. And even though its probably time for change, nothing has been discussed about the possible ethical dilemmas of moving the world’s largest holders of personal data into the controlling positions with capital, but that is another topic for another article. Going forward the questions will be focused on the chess moves of the world’s strongest technology brands as they create more stream-lined financial services for the world before they inevitably gain enough power to break from the dollar it into some form of digital currency.

The Tech-Dollar
If I was a betting man, I would assume that the tech-dollar is going to become a larger factor in the international status of the US dollar’s stability, banking services will become more frictionless, and the dollar’s reign as the world reserve currency will probably be extended for an additional decade. However, these benefits will come at a price. This scenario could play out as the ultimate “deal with the devil” for the dollar, as it will give companies like Apple even more power to negotiate with governments. Before Apple even hit its recent $10b in banking assets mark, it was estimated to be equivalent to the fiftieth country in the world by rank of GDP. Removing these barriers that have kept tech companies out of the financial services sectors is probably not the wisest of moves on this front, but supporting US financial institutions with average annual bonuses that are 5-X the average US household income was probably not going to work out for the long run either. As they say in Louisiana, “Little pigs get fat and big hogs gets slaughtered.” So where does that leave us?

What to do…
Things are in a very precarious position at the moment. It appears that the door that was not open for Facebook in 2019 has been cracked open for Apple and PayPal and that Mr. Musk has also jammed his foot in there with the speed of a Jehovah’s witness after someone accidentally answered the door. It is likely that banking services will improve, but I am not sure that I want my credit score based on my search history. While this all plays out it will probably be important to keep a couple things in mind.

1. As these technology companies move into the financial services space, it may be worth occasionally applying financial services valuation metrics to them to see how they stack up as an investment.

2. Companies in the niche space of actively monitoring and controlling your digital footprint may take on a whole new level of value, as the stakes of your online activities will be elevated to an even higher importance the more financial services are provided by these online social platform companies.

3. The more stable bitcoin pricing (and digital currencies) becomes and the easier it is to use, the more threatened all major country currencies across the globe will be – so expect a fight.
   

Note: If you found anything in this article entertaining or educational, please share it with a friend or on a social media platform.

Thank You!

Christopher LaBorde
The Keyboard Chimp

Christopher LaBorde, his wife and their two children live part time in the Middle East and part time in Louisiana. As a curious engineer and novice researcher that studies a multitude of topics, Chris always welcomes feedback at Chris@silvertrading.net and www.TheSophisticatedChimp.com. All of Chris’s writing is made possible by The Silver Trading Company www.SilverTrading.net , please allow them to help you with any of your precious metals needs domestically or abroad.

As parents of two little ones both under two and a half, my wife and I don’t make it to the theaters very often. So, when last Saturday we were able to make it to see the 10am showing of Oppenheimer we were both extremely excited to be out of the house. The dramatic movie was well played and naturally a bit thought provoking. As a hands-on kind of thinker, my first thought was, “I wonder if we live in a high-priority target area?” and my second thought was “If we don’t live in a target area or next to a nuclear power plant, how far away are we from one and are we downwind?” I allowed these curiosities to send me down the rabbit hole on a bit of an engineer’s journey. The following were some of the findings that came out of it.

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For clarification, this article is not about my feelings on an impending nuclear war, I have no plans to buy or create a nuclear shelter and I don’t plan on making any major life changes under the current circumstances. This article is about assessing location risk based on weather patterns and some of the little things that can be done to hedge. So, how do you assess the risk if you are confident that you are not in an identified high priority target city or next to a nuclear power plant, but the nearest city is closer than 100-miles away?

What are the standard high-value targets?
Finding the nearest nuclear power plant is a straightforward activity so my starting point was trying to locate high value nuclear attack targets. So, “What are the highest priority targets in the U.S. for outside nuclear attacks?” was typed into ChatGPT. As soon as I pressed the “enter” button, I realized that I had simultaneously added my name to a watch list (again) and somehow upset the A.I. model. What followed was the most indignant response I have received to date from a search prompt stating the equivalent of, “How dare you, I am not that type of girl.” Which comically had me trying to explain myself to an A.I. prompt reader that I was just in the middle of a thought experiment. Once past that hiccup, the answers were determined to be the usual suspect criteria for cities, such as: financial hubs, high population hubs, shipping logistics hubs, military logistics hubs, resource hubs or nuclear energy plants. Unfortunately, most of the cities I have spent my life in check one of these boxes, but for the sake of this article, let’s assume you do not live in one of these cities and that you will not be worried about how to get out of a city if the worst happens.

How far away could a nuclear event directly affect my health?
I used to assume that living outside of the blast zone for a meltdown or an event was living outside of the trouble. However, when I read an article earlier this year warning different European cities about needing to stock up on potassium iodide (thyroid protection from nuclear particle exposure) based on the possible destruction of a nuclear power plant over 100 miles away; the reality of the role of the weather variable all clicked together. I am trained as an aerospace engineer and if you were to ask my parents why I chose such a field they would probably tell you that it was the closest I could get to an engineering degree in sailboat racing. I mention this because this little hobby of mine comes with a mandatory amateur meteorology background. This weather background, combined with some trivia on the air velocity of jet-streams, brought me back to the reality that after a significant event radioactive particles could travel over 500 miles away from the event origin, but will likely only accumulate in much closer distances.

What is the travel time of a particle?
Since this little thought experiment had just become a sailing adventure of sorts, the first variable that needed to be sorted was how long a particle could stay air born and “sailing” on different air currents. The consensus on the average radioactive materials used as fissile material for both weapons and energy generation is, uranium-235 or plutonium-239. These materials, in an event, could generate particles of the sizes that would likely fall out of the air on the following schedule:

• Within two-hours 50% of the highest density particles would fall out of the air

• Within 24-hours an additional 30% of the particles (80% total) would fall out

• Within three-days an additional 10% of the particles (90% total) would fall out, and

• Within seven-days the fallout would have grown to what was called “the vast majority” of the particles

How far could your average particle travel?
If you exclude regional weather frontal systems, the average thermal based windspeed in an average US city is between 2 to 10 miles per hour, with an average of a 10% increase in speed for every 1,000’ of elevation. If we assume that the majority of the particles start at an average height of 1,500’ and travel at a maximum average speed of 10.5 miles per hour, you would have the following maximum possible distance traveled by particles

• 50% of all particles would be within 21-miles downwind of the event

• 80% of all particles would be within 252-miles downwind of the event

• 90% of all particles would be within 756-miles downwind of the event

Could a single thermal based breeze really carry particles this far?
I am not a meteorologist, but the simple model described above is probably highly unlikely as thermal based breezes are normally coming towards a heat source headed away from a lack of heat, which are all governed by 24-hour sun-cycles. This means that most of these systems “turn on” and then warm up in one direction, then slow down, “turn off” and ramp up in the opposite direction all within a single 24-hour period. As a result, it would require some extremely unusual thermal activity to get far beyond 30 to 50-miles of linear travel with some very large heat and cold sources (think oceans and deserts). Since most of these thermal based breezes occur around more local heat syncs, they bring about very chaotic wind directions when examined over longer distances (as seen below), which are not conducive to long durations of linear travel. Weather systems and the jet-stream, on the other hand, tend to have far more energy and can distribute particles from much further away in high concentration to other areas.

Early Morning US Wind Vectors Image with Minimal Frontal activity

How far could a particle travel in frontal systems or the jet-stream?
When I met other students in school that told me that they are involved in atmospheric modeling, I generally told them “God bless you and your love for very advanced math,” as I knew I had no appetite for the math that they had to regularly embark on. It is for this reason that we will be dropping any form of calculation going forward and looking at past examples of wildfire smoke paths as a simulation for possible long distance nuclear particle travel. The good news is that smoke particles can stay air born for two to three times longer than the nuclear particles we discussed earlier, but the bad news that you can see below, is that smoke paths show us just how far weather systems and the jet-stream can carry fine particles.

Western Canadian wildfires had clear smoke paths traveling over 3,000 miles in 2023

In 2015 Southern Mexico Wildfires significantly impacted air quality in Houston 1,000 miles away

Is there a “Hedge my bets” answer on weather versus location?
As you can see from the two wildfire examples, there are very few places in the US that are out of reach in terms of distance when it comes to particle travels in frontal systems or the jet-stream, but there are a couple things that should be kept in mind.

• To start with, most weather in the latitudes of the lower 48 states predominantly travels West to East and most cities know the general direction that most of their weather will be coming from when looking at a weather map. If you are not familiar with these general travel patterns of weather in your area it would be worth taking a total of 3 minutes to get more familiar with them and determining how far you are from possible target cities and under what weather patterns that would be an issue. Weather applications like “Windy” are great places to get a feel for how the wind moves closer to the ground. Active wind vector maps are surprisingly captivating.

• The jet-stream can change these patterns for some states very quickly and high northern or southern states can sometimes see more variation in their patterns (sorry Florida).

• It’s also worth noting that the US is known for very extreme weather and to never under-estimate it. Many weather factors come together in the US to produce 5-times more tornadoes than all of Europe, so it is also worth keeping in mind that rules of thumb can easily be challenged under the right conditions.

All of this said, if I was 10 to 50 miles “downwind” of a nuclear facility or possible target I would probably have a more robust plan thought out than if I was 50 to 80 miles “upwind” of one of these locations. In other words, I would much rather be Lawrence Kansas, 50 miles West of Kansas City, than Oakland California, 10 miles East San Francisco.

Still Image of a Live United States Wind Vector Map

What can be done about these particles?
Now that you understand more about the variables of the weather delivery system, you’ll be happy to know that many of the health risks can successfully be mitigated. The primary mechanism by which these particles wreak long-term havoc on the human body are typically from ingestion or inhalation. This means that if you can stay inside in a well-sealed space for the 24-hours, 3-days or a week after an event and avoid directly contaminated food (stay away from your garden), you will be a in better shape than others. The first order of business in this scenario is an honest assessment of how well your space is sealed. The second is probably buying some basic materials that can be found at a hardware store to temporarily seal the space more securely. If you feel that things have changed enough to buy a little tape and plastic, you probably need to consider food, water and the basics of what you need to make it through your standard Montana blizzard. If you are feeling like it is likely that you may need to go outside during this period, the recommendations seem to be long sleeves, high-quality masks and plastic bags to dispose of your clothes once back inside. There are countless great articles that can take it from here on how to prepare for these scenarios, so we can conclude this brief preparation thought into the worst of the worst.

But What to do?
As far as this article is concerned, if we are not talking about nuclear power plant mismanagement, life after that first week is not something I want to spend much time on right now, as it contains many realities that cannot easily be prepared for. As mentioned in the beginning, this article was merely an engineer’s musings on assessing the weather-based risks for the abstract thought of a possible event. The only thought process I hoped to encourage was to assess your own weather-based risks in terms of your location so you have a little more knowledge on how you should be actioning possible future headlines. I am not advocating worry, as it has been said that worriers die twice, once with all the worrying and then again at the end of the journey. However, if you happen to live in a common downwind path of a major strategic target or an active nuclear power plant, it would not be very wise to count on the U.S. government for help at the point in time that you would need it. A little reading, a couple purchases and then forgetting the topic is probably best for one’s mental health.

Money?
Again, if we are not talking about an isolated meltdown of a nuclear energy plant, every source I found for strategic targets had financial centers listed as the primary targets. So, it should probably be assumed that people who can barter with physical goods will likely be in better shape than those who don’t, but again, this is not an article to encourage everyone to plan for the extreme. These days I am just upgrading the quality of my particle masks for construction projects and enjoying dips in the spot price of silver.

The Keyboard Chimp

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Christopher LaBorde, his wife and their two children live part time in the Middle East and part time in Louisiana. As a curious engineer and novice researcher that studies a multitude of topics I always welcome feedback. I welcome any thoughts or feedback at Chris@silvertrading.net . As always, I appreciate the support I get from www.SilverTrading.net that makes all of my writings at www.TheSophisticatedChimp.com possible.

This is the second part of a two part article written over 15 years ago by Larry LaBorde that is still every bit as valuable now (if not more) than it was then. I have updated it a little, but it is very much still my father’s writing. I would like to thank Silver Trading Company silvertrading.net for sponsoring our efforts. - Christopher LaBorde

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In my last post, I reviewed my philosophy about metals storage.  Here I will explore some practical considerations for those of you who want to take delivery of your metals and keep them in your home, on your person or in secure facilities.

A brief history of hiding valuables

For centuries, people have worried about how to store their wealth.  If you are close to someone who lived through the Great Depression in the U.S. you’ll know that many people didn’t trust banks and hid their money and valuables around their own houses.  The last three generations have always trusted the banking system and insurance networks to outsource property concerns around insuring that their wealth and valuables will be there when they need them.  However, over the course of history, it has been common practice to store one’s own valuables. 

Just visit any old European city, affluent sections of Central or South American cities or even old Charleston or the French Quarter in New Orleans, and you will start to notice something about the architecture.  Most of the homes are built like fortresses.  They have very nice interior courtyards but also have walled fronts with heavy doors and heavy shutters on the street windows.  In some locations, it was common to set beverage bottles into mortar along the top of the masonry outer wall and then break off the tops to deter intruders.  During normal times, the heavy main door to the courtyard and heavy window shutters were open, but at night or in times of trouble, these places could securely lock up very quickly. 

Precautions for the modern home

While the modern home in the United States is no longer a fortress, you can certainly keep some of your wealth at home if you choose to do so and take some precautions to make this feasible.

Your secret is safe…as long as it’s secret

The first layer of security is secrecy.  If no one knows there are valuables in your home, then there is no reason for him to come and search for them.  Everyone has seen the pirate movie in which, after the loot is buried, the head pirate kills all of his accomplices then buries them along with the treasure. Not a technique we are recommending, but the idea of secrecy involved has real merit.  Limit the number of people who know where you keep your metals.

You can hide small amounts of gold most anywhere, including within steel fence posts, in the garden or in the yard, in hollowed out books, inside frozen food in the freezer and within the wall space behind dummy electrical receptacles.  The list is endless and can be as varied as your imagination. When my wife’s grandmother passed we found metals hidden all over the house, as she realized that one of her caretakers was a kleptomaniac, but apparently too good to let go of!

If you do hide your metals you should probably tell someone where your own loot is in case something happens to you.  Just make sure it is someone you trust (and who has a good memory!).

C’mon, just tell me!

Another consideration is what pickpockets call a “tell.”  If you hide money on your person in a secret place, you are likely to give it away by regularly checking to make sure it is still there.   Some pickpockets even work in teams to exploit this habit because it is so predictably human:  The first thief simply bumps into someone innocently, and more often than not, the victim immediately touches the secretly hidden goods to confirm that his valuables are still safe.  The second thief, who was watching the encounter, then knows exactly where to lift the cash (or metals) a bit later. 

Likewise, once you hide your metals, its important not to check on them routinely, or you will simply give away your hiding place!  This sounds like a simple task, but most people have real trouble avoiding the temptation. Which makes it very important to pick a place that you can easily observe or can check without being observed yourself.

A safe place

The next layer of security is an actual safe and if the safe itself can be hidden, then all the better. Great hiding places for safes take creativity or effort, like false walls, and add additional time for the “security game,” which is valuable since anything can be opened with enough time.

If you are interested in purchasing a safe, be certain to read one of our earlier posts detailing some practical and technical aspects of evaluating safes.  It will tell you more than you ever wanted to know about safes and safe ratings.

A safer place

Finally, if you are interested in private storage, you will find several options. For example, the Security Center in New Orleans rents private safe deposit boxes in the old Federal Reserve vault; Sovereign Solutions in Las Vegas has a similar operation as well as several others around the world. Give me a call if you are interested, and I will tell you about all the storage spots that we have visited.

Buying precious metals is just the first step. Deciding where to keep them is quite another decision. However, don’t let the issue of storage scare you away. Doing nothing and keeping depreciating currency in a bank that pays little or no interest means you are already having your wealth stolen a little at a time, day after day.

Larry LaBorde

Thank you to Silver Trading Company for Sponsoring our scribblings and allowing us to dive deeper into these topics.
www.Silvertrading.net

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This is the first of a two part article written over 15 years ago by Larry LaBorde that is still every bit as valuable now (if not more) than it was then. I have updated it a little, but it is very much still my father’s writing. I would like to thank Silver Trading Company silvertrading.net for sponsoring our efforts. - Christopher LaBorde

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As a metals broker I get a lot of questions about storage of silver bars, rounds and other forms of metals that investors buy.  Here’s my philosophy.

Store outside the financial system 

This means holding no Exchange Traded Funds (ETFs).  Even though they are ever so easy, you should exercise caution.  Read the prospectus and zoom in on the custody section---if you can stay awake long enough to read it.  

It might surprise you to learn that storing outside the financial system also means avoiding bank safe deposit box storage.  Safe deposit boxes are the worst of both worlds:  They are not insured by the bank, yet they are subject to banking regulations. 

Storing metals outside the financial system also entails holding no commodities contracts held by financial firms like MF Global.  (MF global went bankrupt and stole everybody’s funds through hypothecation)

Take possession if at all possible   (Foreign countries sometimes have restrictions)

Sure, your metals can be stolen, so just like with anything else, you must take appropriate precautions, including locating a suitable storage option.

If for some reason you feel uncomfortable storing all of your metals yourself, look for a non-bank, segregated, insured storage facility (a vault or other depository  (A “depository” is a vault that is pooled storage, not segregated)), preferably one that is insured against loss.  It will cost a bit more than a private deposit box facility, but you will be insured against theft. 

KEY - Also make sure that your metal is in “segregated” storage as opposed to “pooled” storage.  You want to make sure that your exact metal will be returned to you when you are ready.  Visit the depository to see exactly what is involved in depositing metals and more importantly, what is involved in withdrawing those same metals.
Discuss different withdrawal scenarios and make sure that you are comfortable with all answers given for how you will get your metals back to you.

Just how much room will you need? 

• A box of 500 one-ounce Silver Eagles is about the size of a large shoe box, or about 9” x 15” and 6” tall.  A box is worth about $14,500 as of this morning (July 14, 2023).  So if you want to store $100,000 in silver you will need a space about the size of seven (7) large shoe boxes. 

• Large 100 ounce silver bars are a bit more compact and stack much more easily in a smaller space, approximately half of the space of the eagles. 

• 90% silver  is a bit more bulky and doesn’t stack well at all in bulk bags. A $1,000 dollar “face” bag is worth around $18,000 dollars, weighs approximately 40lb and is about ¾ of the Silver Eagles 500 “large shoe box”. 

• Gold, on the other hand, is much more portable than silver and is easily stored.  Just 49 one-ounce gold coins hold a value of a bit over $100,000 and do not take up much room at all.  They could easily fit inside the cardboard tube from a roll of paper towels. 

Weight considerations

• $100,000 of silver (7 - 500-coin boxes of Silver Eagles) weighs about 237 pounds. 

• The same $100,000 of gold (49 one-ounce coins) weighs a right at 3.33 lbs.  A million dollars in gold would only weigh 33.3 lbs or so and could be easily carried off by one person without much effort. 

• A million dollars worth of silver weighs 2,37

  0 pounds and would require quite a bit of effort---and a truck---to carry it all away.

In my next post, I’ll look at some practical considerations for those of you who want to take delivery of your metals and keep them in your home, on your person or in secure facilities.

Larry LaBorde - 2012

(Updated with July 14, 2023 spot prices)

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I would like to thank Silver Trading Company (silvertrading.net) for sponsoring our efforts.