The philosopher’s stone
An ancient medieval legend told how Saint Dominic had discovered the secret of the philosopher’s stone, and how this secret had later reached Thomas Aquinas.
The Treatise on the Philosopher’s Stone, attributed to Aquinas, describes the procedures to obtain it. Among the many properties of the philosopher’s stone, there was that of transforming base metals into gold. Its holder could have gained immense wealth: buying whatever they desired without producing anything.
Someone would call it a “trade deficit”; I call it “living off rent.”
Of course, this is just a legend, tied to a time when we believed that gold had intrinsic value. But there is a way to obtain immense wealth without having to produce: by controlling the currency the entire planet uses to trade.
Whoever can print the international currency—that is, the currency different nations use as a medium to finance exchanges—is like the holder of the philosopher’s stone. Today, China and Europe, Brazil and Argentina, Russia and the United Arab Emirates exchange goods using the dollar as currency.
The dollar is the international currency and, therefore, the philosopher’s stone of our time. Why do the United States enjoy this advantage?
Without hypocrisy, the first reason is military and technological superiority, which no one has questioned since the end of the Second World War, and which makes North America the safest and most stable area on the planet.
The second reason is that the United States is a democracy, which became a refuge for millions of people over the past century—including some of the most brilliant minds on the planet. The third reason is that North America possesses abundant natural resources, which allow its economy to grow robustly.
Military strength, mass immigration, and economic freedom have enabled the U.S. to control the international currency.
Of course, controlling the international currency comes at a cost: it exposes the American economy to inflationary crises every time the global economy slows down; it requires significant investment in military spending and a careful approach to foreign policy.
Today, that cost is increasingly perceived by Americans as too high. That’s their choice, and it’s a legitimate one: they want to toss their philosopher’s stone overboard. They’ll likely do so definitively by undermining the independence of the Fed. We can’t change their minds.
Even though God never commanded anyone to be stupid, He can’t stop someone from doing something very stupid either.
The Treatise on the Philosopher’s Stone, attributed to Aquinas, describes the procedures to obtain it. Among the many properties of the philosopher’s stone, there was that of transforming base metals into gold. Its holder could have gained immense wealth: buying whatever they desired without producing anything.
Someone would call it a “trade deficit”; I call it “living off rent.”
Of course, this is just a legend, tied to a time when we believed that gold had intrinsic value. But there is a way to obtain immense wealth without having to produce: by controlling the currency the entire planet uses to trade.
Whoever can print the international currency—that is, the currency different nations use as a medium to finance exchanges—is like the holder of the philosopher’s stone. Today, China and Europe, Brazil and Argentina, Russia and the United Arab Emirates exchange goods using the dollar as currency.
The dollar is the international currency and, therefore, the philosopher’s stone of our time. Why do the United States enjoy this advantage?
Without hypocrisy, the first reason is military and technological superiority, which no one has questioned since the end of the Second World War, and which makes North America the safest and most stable area on the planet.
The second reason is that the United States is a democracy, which became a refuge for millions of people over the past century—including some of the most brilliant minds on the planet. The third reason is that North America possesses abundant natural resources, which allow its economy to grow robustly.
Military strength, mass immigration, and economic freedom have enabled the U.S. to control the international currency.
Of course, controlling the international currency comes at a cost: it exposes the American economy to inflationary crises every time the global economy slows down; it requires significant investment in military spending and a careful approach to foreign policy.
Today, that cost is increasingly perceived by Americans as too high. That’s their choice, and it’s a legitimate one: they want to toss their philosopher’s stone overboard. They’ll likely do so definitively by undermining the independence of the Fed. We can’t change their minds.
Even though God never commanded anyone to be stupid, He can’t stop someone from doing something very stupid either.
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