I am so sorry about these next few lines, which you must have been exposed to in one form or another somewhere in the public domain in recent months, as the topic of de-dollarization has become something of a popular culture.
There was a time when money represented something of value (gold) stored somewhere (central banks). Mostly, money was moved through accounting entries in the banks’ books, but from time to time, someone actually had to move the gold around. Then in 1971, money was finally and completely detached from any physical valuable thing, and became a social construct for moving value around, with the U.S. dollar being by far the no.1 among them, such that most value began to be (and is) stored in the U.S. dollar in the form of U.S. treasuries.
Somewhere around that time, the Western economies went on a path of financialization, which essentially means that people, companies and governments rapidly increased their debt levels, and the process of managing, selling, marketing, cutting and slicing, repackaging, etc. the ever-increasing debt mass became an industry in itself. We have mentioned it here and here.
After decades of financialization, we’ve ended up with everything-is-collateral-for-everything system, in which money and the vast universe of financial products that sit on top of it are wholly abstract social constructs that are moved…
