4 Key Economic Principles

Howdy this is Devin Rose with Lionheart Catholic.

I want to share four key financial principles that will help you make sense of the economy and your own personal finances.

Triffin's Dilemma
The country who prints the world reserve currency must run ever increasing trade deficits to supply dollars to the world (for trade and for foreign asset reserve purposes)

Hence the U.S. has a huge trade deficit. We export dollars and import commodities and goods cheaply.

This is why the Fed raising rates and doing quantitative tightening is causing such a problem in countries outside the U.S.

But Powell at the head of the Fed answers to U.S. domestic commercial banking interests over Davos/Biden/WEF globalist interests, so the Fed by raising rates protects U.S. commercial banking over the Euro globalists.

https://www.investopedia.com/financial-edge/1011/how-the-triffin-dilemma-affects-currencies.aspx

Cantillon Effect
Those closest to the spigot of new money getting printed benefit disproportionately compared with those who get access to it downstream

When the Fed "prints" money, it does not go into your pocket. The first groups to get access to it are in the big banking cartel.

Only much later does a small fraction of the new currency make its way to you, and when it does, the effect of that new currency has already caused consumer price inflation and asset inflation, so your new dollars buy less than they would have.

https://www.swfinstitute.org/news/89070/what-is-the-cantillon-effect-and-why-its-even-more-important-now

https://mattstoller.substack.com/p/the-cantillon-effect-why-wall-street

Gresham's Law
Bad money drives out good money.

Paper currencies drive out gold and silver. That is, people will spend paper currency and hoard/save gold and silver, knowing it is hard money, real money.

People intuitively know that gold and silver are more valuable that paper currency, which the government controls, prints more of whenever they want, and only has value because the government enforces laws that make people use it.

People are also coming to realize that Bitcoin is good money and is preferable to fiat currencies.

https://www.investopedia.com/terms/g/greshams-law.asp

Lindy effect
The future life expectancy of an idea or technology is proportional to how long it has been around thus far.

Take gold: it has been around since human existence, so it will likely be around for millennia to come and beyond.

Bitcoin has been around about 12 years, so every year that passes increases its chance to continue existing and being used for years and decades to come.

https://en.wikipedia.org/wiki/Lindy_effect#:~:text=The%20Lindy%20effect%20(also%20known,proportional%20to%20their%20current%20age.

Learn more about these topics to grow in resilience in my Lionheart Catholic II book, which you can buy as a bundle with the first volume focused on supernatural resilience: https://www.lionheartcatholic.com/offers/E82KF2vU/checkout